• #1 Business Rescue Experts
  • Helping Directors in Debt
  • Same Day Advice

For free expert advice, send us a message and we’ll be in touch

Is there any Scope for Redundancy Pay for Directors?

Directors of limited companies will certainly have some understanding of redundancy payments and how they might apply to their employees should the situation arise. However, few Company Directors know that they personally may also be entitled to claim statutory director redundancy payments. Employees are able to claim for:

  • arrears of wages
  • accrued holiday pay
  • pay in lieu of notice
  • statutory redundancy payment if working for the same employer for two consecutive years

Company Directors who can prove their status as an employee of the company can also qualify for certain statutory redundancy payments, providing a much-needed financial lifeline.If a company is struggling financially, despite the best efforts of the Directors to turn things around, sometimes liquidation is the most appropriate scenario.If you want any expert guidance on how to approach directors’ redundancy or any other area related to redundancy payments during insolvency, get in touch with the team here at The Insolvency Experts today.

The wealth of legal and financial qualification across our team ensures that we operate within all of the required legal guidelines while providing cost-effective and timely guidance. Our personable financial experts ensure you are given helpful and relatable advice that keeps you up-to-speed throughout the process. We offer peace of mind at a stressful moment through working to find a financial outcome that satisfies creditors, the government, shareholders and directors whenever possible.

We understand that many companies find themselves insolvent through no fault of the directors, so if circumstances have brought on financial difficulties, we help our clients to find a workable financial solution. If you want to discuss our available insolvency practitioners Bolton services, get in touch with us today. We act on behalf of our clients to find the best possible solution to their current financial difficulties.

Our expert financial staff are available to discuss options surrounding Liquidation, Administration and a range of other services we provide, with this advice offered through a free initial consultation. Additionally, if you are seeking an estimate on the price of a Liquidation process for your company, you can make use of our free quote calculator.

Go to Section:

4 Key Questions on Director Redundancy in Insolvency

What does a Director need to prove to qualify for Director Redundancy?

In order to receive statutory Redundancy Payments following the Liquidation of a Company, a Director must be able to prove that they had more than just an advisory or non-executive role. The Redundancy Payments Service will request details, including information such as:

  • was there a Contract of Employment?
  • what were the day to day responsibilities which the Director fulfilled?
  • how did they contribute towards the running of the Company?

In short, the Director must be able to prove to the Redundancy Payments Service that they:

  • had a useful and ongoing role in the running of the Company
  • took a salary using the PAYE scheme, and
  • had a similar relationship to the Company as any other employee.

If the Director can prove these things then they may be eligible for statutory payments in line with other employees.

Call our friendly experts on 0300 303 8284

By quickly taking back control we can help you solve the problems that the business has.

What contract type is required to qualify for Directors’ Redundancy?

The Redundancy Payments Service will be interested in the type of Employment Contract (if any) which existed between the Director and the Company. Obviously, it is easier to prove a Directors’ status as an employee where a written Contract is in existence, but it is worth remembering that a Contract does not have to be recorded in writing in order to be considered legally binding. An oral or implied Contract, whilst perhaps more difficult to prove, can still be sufficient for statutory entitlements to be paid.

The important lesson here is for Directors to make sure that they assist in providing the relevant information to enable the Redundancy Payments Service to confirm proof of their employment by having a written Contract of Employment in force.

How does someone make an application for redundancy payment in insolvency?

All responsible Directors will be keen to ensure that their employees receive what they are entitled to. All employees that are entitled to make a claim for Redundancy Payments can do so via the Governments Redundancy Payments Service. This also applies to Directors who class themselves as employees.

Claims should be made within six months of the date of Liquidation, although in some circumstances we have been able to extend this period to 12 months.The message is simple; a Director should have an employment contract in place, which contains details of the following:

  • Employment start date
  • Any entitlements
  • Position
  • Role


How do I get the right advice on director redundancy payments in insolvency?

For more information regarding redundancy pay for Directors, you should contact an insolvency practitioner who is well versed in advising clients in the UK on this process. Here at The Insolvency Experts, we have a wealth of experience in such applications, so please contact us by phone on 0300 303 8284 or alternatively you can email us at enquiries@theinsolvencyexperts.co.uk.

Company Liquidation Quote

How much will it cost to liquidate your business?

Try our calculator to find out…

Launch Calculator

How we’ve helped others through
rescuing their business

At the Insolvency Experts our sole aim is to rescue, recover and renew businesses that are in difficulty. We are specialists in corporate turnaround and help business overcome cash flow difficulties and other financial problems. Our experts:

  • Help you to take the appropriate steps to meet any impending deadlines
  • Have a long track record in helping companies in similar positions
  • Can help you take the best course of action, often using your assets to help you avoid additional cost

Get a Quote or Get Free Advice

We helped a struggling Birmingham restaurant from going into administation:

  • Turnover £890K
  • Total Creditors £94K
  • Assets £340K
  • HMRC Overdue £20K
  • Profit Now +£15K

We helped a marketing agency from going into administation:

  • Turnover £700K
  • Total Creditors £120K
  • Assets £20K
  • HMRC Overdue £30K
  • Profit Now +£80K

Creditors’ Guide To Fees

How much will it cost to liquidate your business?

Download our free quide to find out…


Why Choose Us?

We understand you have already made every effort to avoid insolvency and day to day life is stressful at the moment. We can start immediately and quickly work with you through the process.

We see many examples of great businesses that have fallen on hard times or suffered through no fault of their own.

We understand that the company directors and shareholders have already tried valiantly to carry on trading, but circumstances dictate that this is no longer possible.

  • We Remove Stress
  • We Act Quickly
  • We Are Cost Effective
  • We Are Formally Accredited
  • We Are CVL Experts
  • We Act Confidentially

Get Free Confidential Advice Now

Get Free, Confidential Advice

0300 303 8284

Request a Callback

For instant, impartial advice request a callback that’s convenient to you

Request a Callback

Request a Meeting

We come to you…

Nationwide Office Visit

We can come to your office at a date and time that’s convenient to you

Request a Meeting

Latest News

What are the advantages and disadvantages of Administration?

According to figures released by The Insolvency Service, 300 companies went into Administration in the last quarter of 2017. Jason Elliott of

Read more

Struggling to pay business debts – understand which are priority and which are non-priority

If you are struggling to pay your debts, it helps to know which ones should take priority and which can be dealt

Read more

Look out for early signs of underperformance

Signs of underperformance can be difficult to spot unless there is a sudden and catastrophic disaster. This could be an unexpected loss

Read more