Here are some of our most frequently asked questions. Click the questions below to see more.
What payments can I apply to the National Insurance Fund for?
The payments that the National Insurance Fund covers are:
- Redundancy – up to a maximum of 20 years’ service
- Loss of Notice – up to a maximum of 12 weeks
- Unpaid Wages – up to a maximum of 8 weeks
- Outstanding holiday pay – up to a maximum of 6 weeks
Who calculates the payments?
The Redundancy Payments Service is a branch of the Insolvency Service; ultimately, it is the RPS that will calculate and make the payment for your outstanding entitlements.
Where does the money come from?
The money is paid from the National Insurance Fund.
How are the payments calculated?
Find detailed information here. Your redundancy entitlement is calculated using the number of full years’ service that you’ve given the company, your age and your weekly salary amount up to a maximum of £525 in the tax year ending 5 April 2020. For redundancy payments, a maximum of 20 years service (or 30 weeks redundancy if you were over 41 for all of those 20 years) will be considered. Your notice, unpaid wages and outstanding holiday will be paid subject to the statutory weekly limits and amounts as above.
Does my company have to be liquidated in order to apply for redundancy payments from the National Insurance Fund?
In short, yes. The National Insurance Fund will only be able to make payments of the full entitlements to employees of insolvent companies. It has recently been announced that Government legislation is being brought in to make it an offence to dissolve a company whilst it owes money to its staff, HMRC or other creditors.
We can recommend a liquidator if you do not have one in mind.
I am not sure if my company is solvent or insolvent. Can you advise me?
We can’t advise you on the solvency of your company. However, we can put you in touch with qualified insolvency practitioners, who will be able to assess your situation and give you clear insolvency advice.
I have been told that only employees of insolvent companies can make an application for redundancy payments, not directors. Is this true?
Yes, and no. Only employees of insolvent companies can make a successful applications to the National Insurance Fund. However, as long as you are both a director and an employee of the company, you should be able to make a successful application. If part of your earnings have been paid via a company PAYE scheme, it is likely that you will be deemed an employee.
How can I be a director and an employee of my company?
In the vast majority of cases, you are or can be both. For those directors who fulfil more than just an advisory or non-executive role, are actively engaged with the business on a daily basis, entitled to a salary paid in part or entirely through the company PAYE system, entitled to paid holiday etc. you are both a director and employee of the limited company. Find more detailed further information here.
I have been told that I need a contract of employment, but I don’t have a written contract of employment. Can I still make a successful claim?
Yes. Your case is stronger with a written contract of employment, however, as long as you have received some of your earnings as salary, your payments received will be representative of the verbal, or implied contract between you and the company. If you are uncertain whether you qualify, try our questionnaire here, or feel free to contact us directly to discuss your case.
How likely am I to be paid by the National Insurance Fund?
We will assess your claim, and tell you the likelihood of success based upon our experience. We will only take your case on if we believe you have a strong case for applying to the National Insurance Fund. If we don’t think you are likely to succeed, we’ll tell you. We’ll give you a best estimate of the amount you are likely to receive at the beginning of the process, and again once we have all of the documentation required.
How much do you charge?
We keep it simple. It’s 15% plus VAT of the payment that you are awarded (nb the net amount less tax and NI deductions etc at source). Our fees will only be payable once you have received payment from the National Insurance Fund.
How long does the process take?
Your application can only be submitted once the company has gone into liquidation. We can recommend a liquidator if you haven’t already instructed one.
We’ll aim for submission as close to this date as possible. This may be delayed where we are waiting for documentation in support of your application e.g. your P60’s, company bank statements etc. however, we will always aim for your application to be submitted as close to the liquidation date as possible.
The Redundancy Payments Service usually requires approximately 6 weeks to process your application. Employee claims can usually be processed in 1 to 3 weeks; however, directors’ claims do take longer to process, as there is a higher level of supporting information required.
Once notification of payment has been received from the RPS, the monies should be with you within 8 working days.
Ask a question
Got a question we haven’t answered? Get in touch using the form below and a member of the Redundancy Assist team will get back in touch with you. We may add your question to the list to help others.
Please contact us by post, email or phone.
49 Duke Street, Darlington, DL3 7SD