Originally posted by CapnAHAB
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Reply to: Redundancy Amounts
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Previously on "Redundancy Amounts"
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If a redundancy isn't handled correctly she could lay the foundation for an unfair dismissal claim, in which case you would be in a position to come to a settlement agreement...
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Originally posted by BolshieBastard View PostNope. Statutory redundancy payments arent minimums or maximums, tax free amount excepted.
These are statutory ie as covered by statute, what employees are entitled to under employment law when they become redundant.
Paying pretty much what you want or 'no limit what can be offered as redundancy' isnt a statutory redundancy payment. What is described there is termed a 'golden handshake' and is where the employer pays over and above what the redundant employee is entitled to as per the statutory redundancy scheme or, as a 'good riddance' payment to get rid of a troublesome employee or as settlement for not taking an employment dispute to tribunal.
When I left the NHS I was paid well above statutory minimum (approx eight times higher if I recall). Nothing to do with golden anything. Nothing exceptional. No toruble. No threat of dispute. Just NHS standard terms.
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Originally posted by Lance View Postpretty much this.
There is no limit on what you can offer as redundancy. The statutory minimums are just that, a minimum.
the NHS pay a month for every year.
I'd be asking the accountant preceisly why he thinks it can't be done. If it's about risk then the OP has a right to know. If it is actually a limit then likewise the OP has a right to know.
My gut tells me that it's not wise, so I understand where the accountant might be coming from, but a business should make decisions based on facts.
These are statutory ie as covered by statute, what employees are entitled to under employment law when they become redundant.
Paying pretty much what you want or 'no limit what can be offered as redundancy' isnt a statutory redundancy payment. What is described there is termed a 'golden handshake' and is where the employer pays over and above what the redundant employee is entitled to as per the statutory redundancy scheme or, as a 'good riddance' payment to get rid of a troublesome employee or as settlement for not taking an employment dispute to tribunal.
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Does she really have a contract of employment... I'll bet not. Did you make her a director? Is she a shareholder?Last edited by northernladuk; 13 March 2020, 13:37.
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Originally posted by wattaj View PostA small point of order: there IS a statutory minimum that is calculated from salary and years of service and capped for some companies -- companies with more than X number of employees I think, but do check.
Closed companies with fewer than X number of employees can do pretty much what they like, but should expect to have to justify their decisions come any investigation.
I've not had the guts to check this with my accountant, but I believe it to be correct.
Your accountant may be trying to make your life easier in the long run.
Advice; worth what you've paid for it.
There is no limit on what you can offer as redundancy. The statutory minimums are just that, a minimum.
the NHS pay a month for every year.
I'd be asking the accountant preceisly why he thinks it can't be done. If it's about risk then the OP has a right to know. If it is actually a limit then likewise the OP has a right to know.
My gut tells me that it's not wise, so I understand where the accountant might be coming from, but a business should make decisions based on facts.
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A small point of order: there IS a statutory minimum that is calculated from salary and years of service and capped for some companies -- companies with more than X number of employees I think, but do check.
Closed companies with fewer than X number of employees can do pretty much what they like, but should expect to have to justify their decisions come any investigation.
I've not had the guts to check this with my accountant, but I believe it to be correct.
Your accountant may be trying to make your life easier in the long run.
Advice; worth what you've paid for it.
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£30k is the maximum redundnacy payment that is free of tax, after that it's taxed at your usual rate.
The amount of redundncy pay is a percentage of salary over time, with a statutory minimum after a qualifying period.
Your accountant is correct. And it's not hard to look up the answers to find out why..
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Originally posted by confused30 View PostI've been employing my wife for the last few years at a salary of £6000. I'm going to be closing my company in April so will be looking to make her redundant at the end of March. I was under the impression I could make a tax free redundancy payment to her of £30k but when I asked my accountant about this he said there is a limit based on actual salary that I have been paying and is giving me a figure far lower.
This doesn't sound correct to me and I can't see anything on the government website about restrictions to amounts, only on statutory amounts. The redundancy amount should be at the discretion of the company as far as I can see.
Is my accountant talking rubbish here?
Do not confuse 'golden handshake' with legally defined redundancy payment. If you want to give your wife a huge redundancy 'payment' dont be surprised if HMRC take a closer look at the company and raise an objection to its closure.
£30k is the max tax free redundancy amount, not the maximum you can just decide to give.
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Originally posted by confused30 View PostI've been employing my wife for the last few years at a salary of £6000. I'm going to be closing my company in April so will be looking to make her redundant at the end of March. I was under the impression I could make a tax free redundancy payment to her of £30k but when I asked my accountant about this he said there is a limit based on actual salary that I have been paying and is giving me a figure far lower.
This doesn't sound correct to me and I can't see anything on the government website about restrictions to amounts, only on statutory amounts. The redundancy amount should be at the discretion of the company as far as I can see.
Is my accountant talking rubbish here?
What has she been doing for the company to earn her salary?
What figure has your accountant given you?
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Redundancy Amounts
I've been employing my wife for the last few years at a salary of £6000. I'm going to be closing my company in April so will be looking to make her redundant at the end of March. I was under the impression I could make a tax free redundancy payment to her of £30k but when I asked my accountant about this he said there is a limit based on actual salary that I have been paying and is giving me a figure far lower.
This doesn't sound correct to me and I can't see anything on the government website about restrictions to amounts, only on statutory amounts. The redundancy amount should be at the discretion of the company as far as I can see.
Is my accountant talking rubbish here?Tags: None
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