smallbusiness.co.uk: Helping your business think big

Q: There’s a chance I’ll be made redundant in December. If I became self-employed before, will this affect the value of my redundancy pay?

Oct 06 2009

Answered by: Peter Done     Ask a question

As there is only a chance of dismissal it appears you are currently only being consulted on redundancy. This means you have not been dismissed and therefore are still employed. If you were to become self-employed while employed, you would need to review your contract of employment to establish if you need permission from your company or if you would be in violation of any of the terms.

If not, and your business did not affect your employment, you would still be entitled to statutory redundancy pay if made redundant while employed. However, if you chose to resign prior to dismissal for redundancy you would not be entitled to any redundancy payment. If you are seriously considering setting up in business, consider speaking to your employer about voluntary redundancy, this way you would still be eligible to receive a redundancy payment.

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