Tax free redundancy prior to MVL

[GhostofTarbera]

Is £30K redundancy still the done thing tax free?

I ask because the chap sitting next to me just got £70K redundancy from Lloyd’s


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[ladymuck]

Redundancy: your rights: Redundancy pay - GOV.UK

Yep £30k

He's got a big bill coming

[cojak]

Yep. Never take redundancy just before the end of the tax year.

[ChevyChase]

Been told by my accountant that redundancy isn't a thing for contractors.

I'd prefer to take 30k redundancy, then close the company, taking the rest via an MVL.

Apparently that's a no-no. Which seems harsh.

[GhostofTarbera]

Been told by my accountant that redundancy isn't a thing for contractors.

I'd prefer to take 30k redundancy, then close the company, taking the rest via an MVL.

Apparently that's a no-no. Which seems harsh.

Other accountants are available

Did he give a reason stating exactly why not?

Your company is making you redundant as HMRC rules have stopped your business from getting future work - hence you are redundant




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[northernladuk]

Other accountants are available

Did he give a reason stating exactly why not?

Your company is making you redundant as HMRC rules have stopped your business from getting future work - hence you are redundant




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He would have to be an employee of his limited and have a full contract of employment to claim. This would mean he wouldn't have been able to pay himself under thr tax threshold as he would have had to pay himself the national minimum wage. That alone makes a vast majority of us ineligible for redundancy.

The other argument is that it is his choice to ease trading. He could keep the company open and only look for outside gigs. His decision to go perm or inside is his alone and not forced on him so also means he can't pay it, even if he met the first condition.

[GhostofTarbera]

Tax free redundancy prior to MVL

He would have to be an employee of his limited and have a full contract of employment to claim. This would mean he wouldn't have been able to pay himself under thr tax threshold as he would have had to pay himself the national minimum wage. That alone makes a vast majority of us ineligible for redundancy.

The other argument is that it is his choice to ease trading. He could keep the company open and only look for outside gigs. His decision to go perm or inside is his alone and not forced on him so also means he can't pay it, even if he met the first condition.

Most contractors I know pay well over the national minimum wage - and how long does it take to “find” your contact of employment you have had for several years - but forgot you had one until now


Where is the National min wage bit - by the way ?


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[Lance]

Been told by my accountant that redundancy isn't a thing for contractors.

I'd prefer to take 30k redundancy, then close the company, taking the rest via an MVL.

Apparently that's a no-no. Which seems harsh.

I know an ex-contractor
who made himself redundant
but as there was no money left
the government paid his redundancy directly.

[I'd like to make a poem.... but it would better if I sobered up....]

[northernladuk]

Where is the National min wage bit - by the way ?

What do you mean? Its law. You can't pay an employee under it. As a directory of your Ltd you are exempt from NMW.

[SueEllen]

What do you mean? Its law. You can't pay an employee under it. As a directory of your Ltd you are exempt from NMW.

Directory? As in telephone?