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
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.
In order to qualify for director redundancy, you must meet a set criteria.
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.
At UK Liquidators, our service is fully partner-led and your case will always be overseen by a fully licensed insolvency practitioner.
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If you are considering liquidation for your company, taking expert advice at an early stage is crucial. At UK Liquidators, our team of licensed insolvency practitioners are committed to providing limited company directors with the help and advice they need to make an informed decision.
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