One of the biggest worries of directors, when their business becomes insolvent, is how they are going to pay the insolvency practitioners fees.

The general cost to liquidate a small company is £4-6,000 depending on who you use.

This can be a large amount of money to find when a business is suffering financially and has cash flow issues.

Although a director can pay for the liquidator’s costs personally, many directors have used up all of their personal money trying to keep the business afloat.

If you are a director who has been registered on the payroll for your company for over 2 years, it’s highly likely that you can claim director redundancy.

The average claim is worth £9,000 which is more than enough to pay the liquidation fee and will leave you with some money in your pocket.

Your claim value is dependent on how many years you have been on the payroll, your age, and your wage.

Here is an example for you:

  • You are 39 years old
  • You have worked for a company for 2 years
  • Your director’s salary is £797 per month, this is the most tax efficient director’s salary, and the rest you probably take as dividends.

Your redundancy claim would be valued at £4,710 which pretty much covers your liquidator’s fees.

If you want to know more about this get in touch for some free and confidential advice.

All the best,
Chris

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