Can I claim director redundancy if my company is liquidated?
Often yes. A director can claim statutory redundancy pay, and sometimes notice pay, unpaid wages and holiday, from the Redundancy Payments Service when the company is liquidated, provided they were a genuine employee of the company, not just an office-holder. The Redundancy Payments Service pays these out of the National Insurance Fund. To qualify you generally need a contract of employment (which can be implied), at least two years of continuous service, a regular salary paid through PAYE, and a real working role in the day-to-day business rather than purely a shareholder or non-executive position. Taking only dividends and no salary usually weakens a claim. Many owner-directors do qualify and are simply unaware of it.
Employee, not just a director
The claim turns on whether you were an employee as well as a director. Being on the board does not by itself make you an employee, but most working owner-directors also have an employment relationship. Evidence that helps includes a written or implied contract of employment, a regular salary processed through PAYE, working set hours in the business, and being treated like other staff.
What you may be able to claim
If you qualify, you can claim statutory redundancy pay based on age, length of service and weekly pay up to the statutory cap, plus potentially statutory notice pay, arrears of wages and accrued holiday pay, all subject to the statutory limits. These are paid by the Redundancy Payments Service from the National Insurance Fund, not by the insolvent company.
How to claim
Claims are made to the Redundancy Payments Service after the company enters a formal insolvency such as a creditors' voluntary liquidation, using the case reference the Insolvency Practitioner provides. Your IP can tell you whether your circumstances are likely to meet the employee test before you claim.
Related: director redundancy, the redundancy calculator, creditors' voluntary liquidation, and company liquidation.
Director redundancy: common questions
Who pays director redundancy when a company is liquidated?
The Redundancy Payments Service pays it out of the National Insurance Fund, not the insolvent company. This is the same statutory scheme that pays employees of failed businesses. You claim after the company has entered a formal insolvency such as a creditors' voluntary liquidation. This is general information; a Licensed Insolvency Practitioner can confirm whether your circumstances qualify.
What makes a director count as an employee for a redundancy claim?
The claim depends on whether you were a genuine employee as well as an office-holder. Helpful evidence includes a contract of employment (which can be written or implied), at least two years of continuous service, a regular salary processed through PAYE, set working hours, and a real day-to-day role in the business. Being a shareholder or taking only dividends with no salary usually weakens the claim.
What can a qualifying director actually claim?
If you meet the employee test you may claim statutory redundancy pay based on age, length of service and weekly pay up to the statutory cap, and potentially statutory notice pay, arrears of wages and accrued holiday pay, all subject to the statutory limits. These come from the National Insurance Fund via the Redundancy Payments Service.
How do I make the claim?
Claims go to the Redundancy Payments Service once the company is in a formal insolvency, using the case reference your Insolvency Practitioner provides. The IP can also tell you in advance whether your role is likely to meet the employee test. Speak to a Licensed Insolvency Practitioner about your own position before assuming you do or do not qualify.
This is general information, not legal or financial advice. Eligibility depends on your specific employment status and is decided by the Redundancy Payments Service. Speak to a Licensed Insolvency Practitioner about your own position. Last reviewed June 2026.