Director redundancy claims

One of the most overlooked rights in a company insolvency is that many directors can claim redundancy pay, and other statutory payments, when their company is liquidated. The reason it is missed is that people think of redundancy as something only employees get. But if you were genuinely employed by your own company, under a contract of employment, paid through PAYE, working enough hours and with at least two years of continuous service, you may qualify as an employee for these purposes and claim from the government-backed Redundancy Payments Service, just like any other member of staff. Successful director claims average several thousand pounds and can be considerably more, and the money comes from the National Insurance Fund, not from creditors. You can also often claim unpaid wages, holiday pay and notice pay. Because eligibility turns on the detail of how you were engaged, it is worth checking carefully. Our calculator gives a quick estimate. Redundancy Payments Service; gov.uk

Key facts

Who can claim: Director-employees: contract, PAYE, enough hours, 2+ years service
Paid by: The Redundancy Payments Service (National Insurance Fund)
Also claimable: Unpaid wages, holiday pay and notice pay
Why missed: Directors assume redundancy is only for employees

It does not come out of creditors pockets

Because the payment comes from the National Insurance Fund rather than company assets, claiming does not reduce what creditors receive. It is a statutory entitlement, not a trick. Use our director redundancy calculator for an estimate, then a practitioner handling the liquidation can help you claim.

Common questions

Can a company director claim redundancy?

Often yes, if you were genuinely employed under a contract, paid via PAYE, worked enough hours and had at least two years continuous service. Eligibility depends on the facts, so it is worth checking.

How much can a director claim?

Statutory redundancy is based on age, length of service and weekly pay up to a cap, so claims commonly run to several thousand pounds, and you may also claim unpaid wages, holiday and notice pay.

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Director redundancy claims. One of the most overlooked rights in a company insolvency is that many directors can claim redundancy pay, and other statutory payments, when their company is liquidated. The reason it is missed is that people think of redundancy as something only employees get. But if you were genuinely employed by your own company, under a contract of employment, paid through PAYE, working enough hours and with at least two years of continuous service, you may qualify as an employee for these purposes and claim from the government-backed Redundancy Payments Service, just like any other member of staff. Successful director claims average several thousand pounds and can be considerably more, and the money comes from the National Insurance Fund, not from creditors. You can also often claim unpaid wages, holiday pay and notice pay. Because eligibility turns on the detail of how you were engaged, it is worth checking carefully. Our calculator gives a quick estimate.

Speak to a Licensed Insolvency Practitioner

Tell us briefly what is happening and we will arrange a free, confidential, no obligation call with a Licensed Insolvency Practitioner. The earlier you get advice, the more options you usually have.

Free, confidential and no obligation. We are an independent information service and introduce directors to a Licensed Insolvency Practitioner. This is general information, not regulated advice.