Job Retention Bonus - guidance published
31 July 2020
As part of the Chancellor of the Exchequer’s ‘Plan for Jobs’, Rishi Sunak announced that the government would introduce a new funding in the form of a Job Retention Bonus (JRB), providing additional support to those employers who keep their furloughed employees in meaningful employment, when the CJRS scheme closes on 31 October 2020. HMRC has now issued detail guidance in regards to the eligibility criteria.
Employers will be able to claim a one off JRB equalling £1,000 for each employee who they have previously claimed for under the CJRS scheme, as long as the employee has remained in continuous employment through to 31 January 2021, and earns at least £520 a month on average between November 2020 and 31 January 2021.
Claims can be made for the bonus after an employer has filed their PAYE for January 2021 and payments will be processed from February 2021.
As with the CJRS, all employers, including recruitment agencies and umbrella companies, are eligible to claim the JRB for each employee if they were eligible for the CJRS and made a claim under it. If an employer made an incorrect claim for an employee, then the JRB will not be payable for that employee.
Employers are advised that they should ensure that:
- PAYE has been filed and paid, accurately and on time inline with current obligations under the Real Time Information (RTI) for all employees
- Enrolment has been maintained for PAYE online
- Employers hold a UK bank account.
Payroll records must be kept up to date with accurate information. Any request from HMRC to provide missing employee data in respect of historic CJRS claims must be upheld. Any failure to do so could endanger an employer’s claim.
JRB claims will be withheld if HMRC suspects that there is a risk that CJRS claims have been made fraudulently or inflated and will not be released until the investigation is closed.
Employers will be able to claim for employees who:
- Were furloughed and had a CJRS claim submitted for them that meets all relevant eligibility criteria for the scheme
- Have been continuously employed by the relevant employer from the time of the employer’s most recent claim for that employee until at least 31 January 2021
- Have been paid an average of at least £520 a month between 1 November 2020 and 31 January 2021 (a total of at least £1,560 across the 3 months). The employee does not have to be paid £520 in each month, but must have received some earnings in each of the three calendar months that have been paid and reported to HMRC via RTI
- Have up to date RTI records for the period to the end of January
- Are not serving a contractual or statutory notice period, that started before 1 February 2021, for the employer making a claim
Employers can claim the JRB for all employees who meet the above conditions, which also includes office holders, company directors and agency workers, including those employed by umbrella companies. The above conditions must be met irrespective of the frequency of the employee’s pay periods, their hours worked or rate of pay.
Employers will only be able to make claims for employees who were eligible for the CJRS. This included those that were on parental leave prior to the 10 June and those that had returned as a military reservist after this date and had been placed on furlough. If an employee is on a fixed term contract and was claimed for under the scheme, then their employer can claim the JRB in respect of that employee, provided the other eligibility criteria are met. Contracts can be extended or renewed without affecting eligibility for the bonus, provided that continuous employment is maintained.
A new employer may be eligible to claim the JRB in respect of employees of a previous business which were transferred to the new employer if either TUPE applies, or the PAYE business succession rules apply to the change in ownership. A new employer may also be eligible to claim the JRB in respect of the employees associated with a transfer of business from the liquidator of a company in compulsory liquidation where TUPE would have applied, were it not for the company being in compulsory liquidation.
Where employers are wishing to claim the JRB under these circumstances, the transferred employees must have been furloughed and successfully been claimed for under the scheme by their new employer. An employer will not be eligible for the JRB in respect of any employee transferred under TUPE, or under the business succession rules after 31 October 2020.
As previously stated, where a claim for an employee was incorrectly made, a JRB will not be payable.
Detailed guidance will be published at the end of September 2020, which will explain what will be included in the £520 earnings, and how employers will be able to make the claim.
Employers are reminded that this one-off payment of £1,000 per eligible employee is taxable, so the employer must include the whole amount as income when calculating the taxable profits for Corporation Tax or Self-Assessment.
In preparation of making a claim, employers should ensure that their employee records are up to date and that accurate information has been reported to HMRC via RTI. All CJRS claims should be checked to ensure that they have been accurately submitted and that any amendments have been notified to HMRC.
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