Family & Relationships2 mins ago
Redundancy for Directors
4 Answers
My husband, son and myself are directors of our limited company. Our son is not a shareholder. My husband and I are retiring and the business will then cease to exist. Are we all entitled to redundancy payments? We all qualify in years of service.
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The limited company, Ethel.
Sound a great idea, but there are likely to be problems with HMRC. See here (or post your own question on this web - which is infested with tax 'experts'.
http://www.taxationweb.co.uk/forum/discuss.php ?id=19904
Sound a great idea, but there are likely to be problems with HMRC. See here (or post your own question on this web - which is infested with tax 'experts'.
http://www.taxationweb.co.uk/forum/discuss.php ?id=19904
Surely as you are retiring you will not be made redundant. The company will not go under until after you have retired.
Wouldn't it be better if you get made redundant before you retire?
It complicates matters as you are also shareholders as they presumably won't get a dividend if the company is going under
One for a financial and tax expert methinks
Wouldn't it be better if you get made redundant before you retire?
It complicates matters as you are also shareholders as they presumably won't get a dividend if the company is going under
One for a financial and tax expert methinks
Which is why I referred them to the experts' site.
The directors can declare the business is ceasing trading, terminate the employment contracts with employees (which includes the directors who are employees as well) and declare those employees redundant - the work required of them has ceased). Remaining shareholders funds are distributed on wind-up of the company.
However it is likely that HMRC will smell a rat because redundancy payments up to �30k are not taxable and it would be a way of extracting profits from the business in a way which which is neither PAYE or Dividends.
The directors can declare the business is ceasing trading, terminate the employment contracts with employees (which includes the directors who are employees as well) and declare those employees redundant - the work required of them has ceased). Remaining shareholders funds are distributed on wind-up of the company.
However it is likely that HMRC will smell a rat because redundancy payments up to �30k are not taxable and it would be a way of extracting profits from the business in a way which which is neither PAYE or Dividends.
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