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Case Study: Car Care Company

Car Care Company

Mr. and Mrs. C had been successfully operating their car valeting company in Lancashire for over 16 years when the Coronavirus pandemic hit. The country went into lockdown and literally overnight the company went from a viable solvent business to having no turnover. Many of its clients were corporate clients and car dealerships and the requirement for car valeting rapidly disappeared as a direct result of Covid 19 and the lockdown. To add to the business’ woes their bank, with whom they had previously enjoyed a long-standing problem free arrangement, decided to withdraw their overdraft facility four weeks into the lockdown. This was despite the business never having defaulted on any payments to the bank. 

After conversations with their accountants Mr. and Mrs. C made the difficult decision to put the business into a voluntary liquidation. The business model operated on small margins and although solvent prior to the lockdown it was decided that without massive reserves the business was not sustainable. In addition, the uncertainty surrounding the length of the lockdown and the restrictions likely to be imposed post lockdown crystallised their decision to wind the business up. They believed that the business would not be able to bounce back from the impact of Covid 19.

Mrs. C had been made aware of by a liquidator who advised her that she may be eligible to claim a director’s redundancy payment. Mrs. C was not confident in making a claim as she believed that she and her husband would disqualify themselves by seeking to voluntarily liquidate the business. In addition, they had only been paying themselves a minimal wage and believed any claim values could be quite low.

Mr and Mrs C were advised of their rights under the Employment Rights Act 1996 and that, due to subsequent case law and the fact that the business had paid them a wage, the directorship was irrelevant with regards to the legislative tests in the application to the Redundancy Payments Office. In addition, although the decision to liquidate was made on a voluntary basis, the decision was driven by the business becoming unable to meet its debts.

Both had 16 years of service and due to their ages Mr and Mrs C were able to claim £14,910.59 and   £14,328.40 respectively through Redundancy Claims UK. Mrs. C described these funds as a lifeline as it gave them a breathing space to find jobs or alternative income without the added stress of worrying how the bills would be paid in the immediate future.

They were able to make a successful claims because they decided to work with an organisation that not only understands the legal framework and case law to make an application for redundancy and other statutory entitlements to the Redundancy Payments Office but also appreciates the financial and emotional concerns of its clients.  Mrs. C advised that she was drowning in paperwork and forms due to the liquidation process and the closure of the business and felt that the application to the Redundancy Payments Office would have been a complex and lengthy process  Redundancy Claims UK took away the pressure of   the claims process and also maximised the value of their claims which is something that Mrs. C felt that she and husband would have been unable to do.

Mrs. C also commented that she found the team at Redundancy Claims UK helpful and professional throughout the process and any questions she had were deal with promptly and efficiently. She felt included in the process and she and her husband were very happy with the service.

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