Contractor - Redundancy?
Discussion
powelly said:
Du1point8 said:
but you are not being made redundant, you are the owner of the Ltd.
The Ltd lost a contract, not you...
yes, but as the director of the ltd company can I make my only employee redundant?The Ltd lost a contract, not you...
Are you wanting to keep the company? If not dissolve it and do the same thing... but how do you logically think that you can make yourself redundant as the only employee and owner... dont even start asking about making someone else secretary and them making you redundant.
fergywales said:
The issue is that your question in your OP is another example of what is destroying this country financially. Someone wanting a hand out from a government pot that is not only empty, but £Billions overstretched.
Now don't get me started on putting into a pot all of my life as I have strong worth ethics, living a healthy lifestyle so I don't call on the medical profession, staying within the law so I don't call on the services, and only being eligible for £64 per week for 6 months..... when millions never do a days work in their life.... please don't. I pay my dues, as does my company. It was just a simply factual question, to which I think I have the answer.powelly said:
fergywales said:
The issue is that your question in your OP is another example of what is destroying this country financially. Someone wanting a hand out from a government pot that is not only empty, but £Billions overstretched.
Now don't get me started on putting into a pot all of my life as I have strong worth ethics, living a healthy lifestyle so I don't call on the medical profession, staying within the law so I don't call on the services, and only being eligible for £64 per week for 6 months..... when millions never do a days work in their life.... please don't. I pay my dues, as does my company. It was just a simply factual question, to which I think I have the answer.
Have some self respect. I am sure you have availed yourself of the benefits of operating under a limited company. Your self righteous justification is frankly pathetic considering your question and reasoning.fergywales said:
Have some self respect. I am sure you have availed yourself of the benefits of operating under a limited company. Your self righteous justification is frankly pathetic considering your question and reasoning.The OP asked a question on technicalities of tax/redundancy law, has learnt he can't do what he suggested, no one is suggesting trying to evade tax or take handouts.
Du1point8 said:
powelly said:
wow busy day! Thought this topic might have been dead. So am a Director and an employee, in essence the only employee, contracted to an agency that contracts to the client, legit outside of IR35. So the original thought was could I legitimately make myself redundant as the contract had been cancelled as it may be a while before I get another placement and it could be tax efficient for me personally not to have my ltd. company sat there until the next thing comes along.
Of course, I'm not considering leaving the contract market, but when times are 'sticky' was wondering if there was a clever 'tactical' way through it all that was within the legal system.
but you are not being made redundant, you are the owner of the Ltd.Of course, I'm not considering leaving the contract market, but when times are 'sticky' was wondering if there was a clever 'tactical' way through it all that was within the legal system.
The Ltd lost a contract, not you...
To be made redundant, you would have to be made redundant by the company of which the OP is a director. The fact that a source of incomed for his company has dried up is totally itrelevant.
Eric Mc said:
Exactly.
To be made redundant, you would have to be made redundant by the company of which the OP is a director. The fact that a source of incomed for his company has dried up is totally itrelevant.
No it isn't.To be made redundant, you would have to be made redundant by the company of which the OP is a director. The fact that a source of incomed for his company has dried up is totally itrelevant.
People aren't redundant - roles are redundant.
If the contract was to make widgets, and OP was employed as widget maker, and OP Ltd loses widget making contract then the role is redundant and a formal meeting notifying that the role may be at risk is scheduled. Then the consultation procedure may be followed, depending on the outcome of the at-risk meeting.
If OP was the accountant at OP Ltd the loss of the widget making contract would not necessarily make the role of accountant a redundant role.
powelly said:
yes, but as the director of the ltd company can I make my only employee redundant?
What if you employed someone as 'Admin, research and motivation officer' that you could no longer afford ? Can I make my Wife redundant ? She works for me, but TBH I Actually think I have grounds for a Sacking. I came home last Friday and didn't get my share of the 'motivation' until much later. johnfm said:
Eric Mc said:
Exactly.
To be made redundant, you would have to be made redundant by the company of which the OP is a director. The fact that a source of incomed for his company has dried up is totally itrelevant.
No it isn't.To be made redundant, you would have to be made redundant by the company of which the OP is a director. The fact that a source of incomed for his company has dried up is totally itrelevant.
People aren't redundant - roles are redundant.
If the contract was to make widgets, and OP was employed as widget maker, and OP Ltd loses widget making contract then the role is redundant and a formal meeting notifying that the role may be at risk is scheduled. Then the consultation procedure may be followed, depending on the outcome of the at-risk meeting.
If OP was the accountant at OP Ltd the loss of the widget making contract would not necessarily make the role of accountant a redundant role.
Surely these redundancy regulations relate to individual PEROPLE, not corporate entities.
Eric Mc said:
And would the limited compoany which found its services not being needed be able to claim redundancy pay?
Surely these redundancy regulations relate to individual PEROPLE, not corporate entities.
EricSurely these redundancy regulations relate to individual PEROPLE, not corporate entities.
The proposal here, I think, is that OP Ltd make OP redundant on the basisi that the role of widget maker is now a redundant role as OP Ltd no longer have any orders for widgets.
The issue is whether the law distinguishes between OP the director and OP the widget maker.
OP Ltd may have OP (director) on a service contract. I don't know if there would be a separate contract of employment for OP (the widget maker).
I cannot see how HMRC would not have closed off a gaping loophole like this - or contractors would be paying themselves £30k tax free ex-gratia paymetns fro loss of office every time their umbrella Ltd company loses a contract.
johnfm said:
Eric
The proposal here, I think, is that OP Ltd make OP redundant on the basisi that the role of widget maker is now a redundant role as OP Ltd no longer have any orders for widgets.
The issue is whether the law distinguishes between OP the director and OP the widget maker.
OP Ltd may have OP (director) on a service contract. I don't know if there would be a separate contract of employment for OP (the widget maker).
I cannot see how HMRC would not have closed off a gaping loophole like this - or contractors would be paying themselves £30k tax free ex-gratia paymetns fro loss of office every time their umbrella Ltd company loses a contract.
The criterion that must be met to effect redundancy, following the legal guidlines for the process, cannot be made by one person about the same person (just one of the many hoops to jump through to effectively make someone redundant). Whilst one person can make a role redundant, if the person who is making that decision is the same person who is affected by it, how is objectivity formed in reaching the decision?The proposal here, I think, is that OP Ltd make OP redundant on the basisi that the role of widget maker is now a redundant role as OP Ltd no longer have any orders for widgets.
The issue is whether the law distinguishes between OP the director and OP the widget maker.
OP Ltd may have OP (director) on a service contract. I don't know if there would be a separate contract of employment for OP (the widget maker).
I cannot see how HMRC would not have closed off a gaping loophole like this - or contractors would be paying themselves £30k tax free ex-gratia paymetns fro loss of office every time their umbrella Ltd company loses a contract.
As you point out, had this been an issue, HMRC would have slammed the door shut long ago. Thankfully, most directors of single person limited companies have both the faculty and scruples when such an idea as raised in this topic enters their head, as to not embarrass themselves by asking publicly if they can get a freebie from the Government.
Eric Mc said:
A director is not an employee and cannot make himself redundant from his own company.
google search produced this.I expect further research would produce case law (but I cannot be arsed).
http://www.lemon-co.co.uk/article_directors-shareh...
In summary, it depends.
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