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Where does the money for director redundancy come from?

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How do the Redundancy Payments Service (RPS) source funds for director redundancy?

Written by Jonathan Munnery

Typically when a company makes redundancies, it is the responsibility of the company to pay for all redundancy costs. However, when a company is insolvent, there is simply not enough money within the business to do this.

In this instance, the redundancy is paid by the Redundancy Payments Service (RPS) via the National Insurance Fund. This applies to both staff and director redundancy costs. The RPS then become a preferential creditor of the company during the liquidation, and will seek to recoup their costs when the distribution of company funds is made

Although nobody goes into business expecting their company to fail, UK Liquidators were supportive and helpful through the whole liquidation process, and I would have no hesitation recommending them to others in the same position.
Paul Winter
Common Liquidation Questions
How much redundancy could I claim?

The amount of redundancy you will be entitled to will be based on a variety of factors including your age, length of service, and the salary you paid yourself through the company.

Do I qualify for director redundancy?

In order to qualify for director redundancy, you must meet a set criteria.

What is director redundancy?

Director redundancy is similar to staff redundancy in that it provides a financial lifeline to individuals who have lost their job through no fault of their own.

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