For about 30 years my client has been the director and sole shareholder of a limited company that imports and sells high-quality garments. Activity ceased during the pandemic although my client continued to draw a small salary from reserves. She has recently started to trade again but is wondering whether this would be a good time to stop work.
She has asked whether she could take some of the company’s cash reserves as a tax-free redundancy payment. My concern is that if the company simply stops trading my client would in effect be retiring and such a payment would be taxed as earnings.
If she could find a buyer for the company or its business would this support the redundancy argument and would it make any difference if she were made redundant before or after the sale?
I would appreciate any comments or advice...
Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.