More information on the Job Retention Bonus

This month, HM Treasury published further guidance on the Job Retention Bonus. This was a measure announced by the Chancellor, Rishi Sunak, at the ‘Plan for Jobs’ statement back in July.

Essentially, employers who return employees from furlough and keep them continuously employed until 31 January 2021 can be entitled to a £1,000 one off taxable payment.

The scheme is designed to continue to support jobs through the UK’s economic recovery from coronavirus by encouraging and helping employers to retain as many employees who have been on furlough as possible.

Which employers are eligible?

An employer can claim the bonus if they have furloughed employees and made an eligible claim for those employees through the Coronavirus Job Retention Scheme (CJRS). Eligible employees must have been continuously employed from the end of the last CJRS claim until 31 January 2021.

The bonus can also be claimed for individuals who are not employees, such as office holders or agency workers where the business claimed a grant for them under the CJRS and so long as the other Job Retention Bonus eligibility criteria are met.

Employers cannot claim the bonus if they have repaid CJRS grants to HMRC.

Is there a minimum income threshold?

There’s a minimum income threshold which companies must have paid their employees in each relevant tax month and enough to meet the minimum income threshold.

To meet the minimum income threshold, an employer must have paid the employee a total of at least £1,560 (gross) throughout the tax months:

• 6 November to 5 December 2020
• 6 December 2020 to 5 January 2021
• 6 January to 5 February 2021

This threshold applies regardless of any circumstances which could have reduced the employee’s pay in the relevant tax periods, such as being on statutory leave or unpaid leave.

How does my business claim?

The earliest that this bonus can be claimed is 15 February 2021 and government guidance on how to claim will be updated prior to the opening of the scheme.

Before it can be claimed, employers must:

• be enrolled for PAYE online.
• comply with PAYE obligations to file PAYE accurately and on time under Real Time Information reporting for all employees between 6 April 2020 and 5 February 2021.
• keep payroll up to date and make sure the leaving date for any employees that stop working before the end of the pay period that they leave in has been reported.
• use the irregular payment pattern indicator in Real Time Information (RTI) for any employees not being paid regularly.
• comply with all requests from HMRC to provide any employee data for past Coronavirus Job Retention Scheme claims.

Employers can make a claim up until 31 March 2021 so it will be a tight window.

Further guidance

There is a lot of information on the government website – the link is below. If you need guidance on how to make your claim when the time comes or the potential tax implications please get in touch.

https://www.gov.uk/guidance/steps-to-take-before-calculating-your-claim-using-the-coronavirus-job-retention-scheme