Winding up company/ redundancy etc

[northernladuk]

Interesting stuff. If you are going by the statutory line then it says....

Your employer must give you a lump-sum payment if:

•you are made redundant;
•you have at least two years continuous service; and
•you meet the other conditions set out in this document.

I guess we would need to know if you can give statuory payment even though the company doesn't have to. Either way this would amount to next to nothing bearing in mind what they are paying her.

Another interesting paragraph is the last one in the link you gave.

HM Revenue & Customs draw a distinction between payments that are genuinely made to compensate the employee for the consequences of redundancy, and terminal bonuses. It accepts that the former fall within ITEPA 2003, s403, but not the latter. An employer who wishes to pay enhanced redundancy payments should submit the scheme to the PAYE Inspector for a ruling as to whether the payments can be treated as falling within ITEPA 2003, s403 [SP 1/94].

Which is a right ball ache and would be difficult to prove the bonus is to help find work so could just be taxable anyway so looks like this might not fly as a tax free option anymore.

[Clare@InTouch]

Interesting stuff. If you are going by the statutory line then it says....

I guess we would need to know if you can give statuory payment even though the company doesn't have to. Either way this would amount to next to nothing bearing in mind what they are paying her.

Another interesting paragraph is the last one in the link you gave.

Which is a right ball ache and would be difficult to prove the bonus is to help find work so could just be taxable anyway so looks like this might not fly as a tax free option anymore.

I think it would very hard to argue that last point. The same restriction would apply to directors who try to pay themselves £30k tax free - if they can't prove it was a commercial type transaction then it will be disallowed and taxed under PAYE. It could be an expensive mistake, in which case you're better off paying it as a dividend or capital gain in the first place and not taking the risk.