When your company enters insolvency, you may be entitled to claim statutory redundancy payments as a director-employee through the government's Redundancy Payments Service. To qualify for statutory payments, including redundancy pay, unpaid wages, and holiday pay, you must meet strict eligibility criteria.
When a company enters formal insolvency proceedings, directors who hold employment contracts with the business may be entitled to claim statutory redundancy payments and other employment-related entitlements. These claims are processed through the Redundancy Payments Service (RPS), a government scheme that ensures eligible directors receive their statutory payments when their company can no longer afford to pay them.
Director redundancy claims can include statutory redundancy pay, unpaid wages, accrued holiday pay, and notice pay. To qualify, directors must meet specific criteria regarding their employment status and relationship with the company. Our licensed Insolvency Practitioners can assess your eligibility and guide you through the claims process.
Director redundancy claims are not automatic—you must meet specific criteria to be eligible. The Redundancy Payments Service scrutinises director claims carefully to ensure the employment relationship was genuine and not simply a nominal arrangement for tax purposes. This scrutiny exists because directors occupy a dual role as both employees and decision-makers.
Essential requirements
To qualify for director redundancy payments, you must satisfy all of the following conditions:
Additional considerations
You should consider making a claim if:
Common disqualifications
You may not qualify if:
Our licensed Insolvency Practitioners can assess your specific circumstances and advise whether you meet the eligibility criteria for director redundancy claims.
Your Insolvency Practitioner reviews your employment contract and working arrangements to confirm you meet the eligibility criteria for director redundancy claims.
We help you compile all necessary documentation, including employment contracts, payslips, company accounts, and evidence of your working relationship with the company.
Your Insolvency Practitioner prepares and submits your redundancy claim forms to the Redundancy Payments Service, ensuring all calculations are accurate and supporting evidence is complete.
The Redundancy Payments Service reviews your claim. Your Insolvency Practitioner liaises with the RPS on your behalf and responds to any queries or requests for additional information.
Once approved, the RPS processes your payment directly to you. Your Insolvency Practitioner ensures you understand what has been paid and advises on any additional claims you may be entitled to make as a creditor of the company.
Director redundancy claims are just one aspect of the wider liquidation process. Our experienced Insolvency Practitioners provide comprehensive support throughout your company's insolvency journey, from the initial consultation through to the final closure of the liquidation.
Whether you're considering liquidation or need advice on potential statutory entitlements, our team are here to make the process as straightforward as possible.
Connecting UK businesses and professional advisers with experienced, licensed Insolvency Practitioners across England and Wales.
Insolvency Practitioners is a trading name of BTG Begbies Traynor (Central) LLP a limited liability partnership registered in England and Wales No. OC306540. The firm is authorised by the FCA to undertake debt counselling and debt adjusting and its reference number is 660455. Copyright 2026 Insolvency Practitioners, all rights reserved.