If your company is going to be liquidated, members of staff may be eligible for statutory redundancy pay. This money will be paid from the company’s assets if sufficient funds are realised, otherwise the payments are made from the National Insurance Fund (NIF).
The criteria for receiving redundancy pay are as follows - they apply to part-time employees as well as those working on a full-time basis:
Those who worked on a fixed term contract that lasted for more than two years may be eligible if the contract isn’t renewed due to liquidation. It’s also worth remembering that, as a director, you may be eligible to claim redundancy yourself if you meet the following criteria in addition to those conditions mentioned above:
It isn’t commonly known that directors can claim statutory redundancy pay when their company is liquidated, but with the average claim being around £12,000, it’s worthwhile considering your eligibility.
The calculation for redundancy pay contains three elements – an employee’s age, length of service, and weekly wage.
The appropriate amount of pay is multiplied by the employee’s length of service to arrive at a figure for their redundancy pay, but there are caps in place.
National Insurance isn’t payable on redundancy, and tax is payable only on redundancy pay over £30,000.
If you need more information on employee redundancy pay, our experts at Redundancy Claims UK can explain their rights and entitlements following the liquidation of your business. We will also advise you on your own eligibility as a director/employee.