Paying redundancy to an ex-employee after the business closed and payroll stopped

[Weave]

Hi

A friends restaurant closed a year ago due to damage to the building and the owner of the building decided to sell for redevelopment. The employees were paid for a while by the insurance but then that stopped and the payroll was closed and HMRC notified.

One of the employees has now put in a claim for statutory redundancy pay as they were employed by the business for 20 years under previous owners. My friend only employed the person for 10 months and was not aware of their liability to redundancy pay from previous owners employing this person in the same role. My friend is hoping a final payout by the insurers may cover this claim but the payroll is no longer running to declare the payment through.

Can my friend simply pay this person by bank transfer and record it as statutory redundancy pay in the business accounts?

It will be less than £30k and does not include any other payment, it is purely statutory redundancy pay so my understanding is there is no NI or income tax to be paid by the employee.

Thanks.

 

[Newchodge]

Possibly, 20 years' redundancy sounds as if it ought to exceed £30,000. Are you sure the calculation is right? What was their normal salary when they were dismissed?

 

[Weave]

Just above living wage and between 35 and 40 hours a week. The GOV calculator was used to come up with the figure.

 

[Newchodge]

Ok, then just write to the employee giving the calculation and pay by bank transfer.

 

[Weave]

Great, thank you for your help.