Originally posted by anim
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At its simplest, just for your sake, you can be made redundant if you have a position in an organisation as a full employee with a contract of employment and a nominated post in that organisation, and if that post is removed from the organisation for any reason, and if you have a given term of engagement in place, and if you have no other connection to the company such as a directorship or other substantive post (look it up).
Compensation can be at any level from zero upwards at the organisation's discretion, but there are legal minima to cover ex-employees, based on length of service.
HMRC will have to be involved, as part of the paperwork. If HMRC suspect someone has been made redundant purely to avoid taxation - for example if the role persists afterwards - they will investigate and prosecute.
Those are the basics. There are, of course, lots of detail exceptions and edge cases which feed into employment law, TUPE and a host of other niggly details, should you want to do your own research..
End result is if a cowboy one man band tries to use redundancy as an excuse to gift money to a spouse free of tax, HMRC will certainly be taking an interest.
HTH. BIDI.
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