Mr I Wheeldon, Harrogate

"I had honestly never heard of Directors claiming redundancy but I made a claim and this pay out has made a huge difference."

Most Directors are not aware that they could be eligible for a redundancy payment from the Government when their company closes.

It is a common misconception that Directors have no right to claim redundancy but just like any other employee (regardless of your shareholding or ownership of the company) you may be eligible to claim and also receive any outstanding wages or holiday pay you are owed.

Redundancy payments would normally be met by the company but if the business is insolvent and unable to meet its liabilities the Redundancy Payments Office will administer the claim instead and pay the money from the National Insurance Fund.

Very few Directors are unaware of their statutory entitlements when they close their company and thousands are missing out on substantial payments (these are subject to your individual circumstances and not all Directors will qualify) from the National Insurance Fund.

The maximum redundancy payment is £15,750 (plus outstanding wages etc) and these funds are personal to you and can be utilised as you choose.

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Case Study 1 – Security Services Company

Contracts had not been costed properly and the accounting system was non existent. The company was leaking money and when we scratched the surface it was clear that large debts had built up.

Case Study 2 – Builder

The downturn in the housing market saw a major change in fortunes for this company. Contracts disappeared and existing projects were scaled back. Having taken on employees and bought additional equipment during the housing boom this left the business in an impossible situation.

Case Study 3 – Florist

Like most businesses this limited company saw a fall in sales as the recession took hold. Flowers were seen as a luxury item and with money tight customers dried up. The bigger wedding and corporate buyers also began to spend less.