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Why can't a company pay redundancy?

A company is going to strike off voluntarily, why can't they pay redundancy?

Didn't find your answer?

Please forgive me if this is obvious.

If a company goes down the voluntary strike off option rather than liquidating, why are they not able to pay redundancy to the directors?

I've googled to find out why but I can't see it.

Replies (7)

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By MECtax
10th Feb 2020 12:44

Surely if you could pay a director £30K tax free on redundancy most companies would do this every year!!

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Stepurhan
By stepurhan
10th Feb 2020 13:05

For most small companies, the directors are office holders and not employees. Redundancy is only available to employees.

See this article on what is likely to need to be in place for directors to get redundancy.

https://www.thegazette.co.uk/all-notices/content/101126

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Replying to stepurhan:
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By mrshamilton
10th Feb 2020 13:59

That's an amazing link thank you

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Replying to stepurhan:
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By The Dullard
10th Feb 2020 14:02

That's just statutory redundancy. An employer can make a redundancy payment beyond the statutory amount is they wish.

There is case law that shows the OP's plan doesn't work. Can't recall it though

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Replying to The Dullard:
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By Wanderer
10th Feb 2020 15:29

These suggest that:-
https://www.companybug.com/receive-a-tax-free-redundancy-payment/
https://www.companybug.com/can-i-receive-a-tax-free-redundancy-payment-f...

Looked into it over ten years ago, genuine business closure, and reached the conclusion that it was a non starter.

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Replying to Wanderer:
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By mrshamilton
11th Feb 2020 11:06

and bingo - that's my answer thank you, makes sense now

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By frankfx
10th Feb 2020 20:13

ACAS

https://www.acas.org.uk/your-rights-during-redundancy

a wonderful resource for all things employment related

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