Why Directors are able to get money back
Are directors entitled to redundancy pay?
Have you worked more than 16 hours per week? For more than 2 years continuously?
Have you been entitled to remuneration from the company, with at least part of your salary going through the company PAYE?
Then you are entitled to redundancy pay. Regardless of how long you have worked for the company, you will also be entitled to (at least) a paid statutory notice period, together with any unpaid salary the company owes you, and/ or outstanding holiday days.
Can directors claim to the National Insurance Fund?
If the company is unable to pay your outstanding employment entitlements, you will be able to apply for payment from the National Insurance Fund, once the company enters formal insolvency.
Why are directors able to get money back?
I am a sole director and 100% shareholder of a company, can I really also be an employee of my limited company?
In practice, some of the most common indicators of employment will be:
|Director / Employee||NOT employee: office holder / shareholder|
|You are working under a contract of employment or a contract of service – whether that is written or oral / implied||No contract of service / employment|
|You provide your services to the company on a regular (daily) basis i.e. have recognisable working hours and the company is obligated to pay you in return for your service||Required on an infrequent basis, having minimal duties, perhaps only those required under the relevant statute, or trust deed|
|You are entitled to a salary||Not entitled to a salary / regular payment|
|At least some of your salary is paid through the company’s PAYE scheme (it is common that this will be made up with dividend payments on top)||Perhaps only paid a voluntary honorarium, or shareholder’s dividends|
|You are entitled to take paid holidays (although whether you have actually been able to take all of them is a different matter!)||No paid holiday entitlement|
|A notice period is / should be required by either party to terminate your employment|
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