As part of Rishi Sunak’s ‘Plan for Jobs’, the Job Retention Bonus was devised to encourage businesses to continue the employment of their furloughed staff once the Coronavirus Job Retention Scheme comes to a close at the end of October.
What is the payment?
The bonus constitutes a one off, £1,000.00 payment per member of staff that was previously claimed for under the CJRS and that remains employed until at least 31st January 2021.
The payment is fully taxable so businesses must include the whole amount received as income when calculating their taxable profits for Corporation Tax or Self-Assessment.
Who can claim?
All employers who made successful, legitimate claims for furloughed employees are eligible- including recruitment agencies and umbrella companies.
To claim, employers should ensure that they have:
- Complied with their obligations to pay and file PAYE accurately and on time under the Real Time Information (RTI) reporting system for all employees
- Maintained enrolment for PAYE online
- Correctly completed the CJRS claims using the HMRC claim portal
- A UK bank account
Keeping up to date with payroll and the requests of HMRC is paramount (including any ongoing requests for corrected or missing data with regards to the Coronavirus Job Retention Scheme) as not doing so may lead to a rejection of the Job Retention Bonus claim..
If HMRC believes that claims made under the CJRS may be fraudulent, the bonus will be withheld until their enquiries are completed.
Employers that have employees who have been transferred under TUPE (Transfer of Undertakings (Protection of Employment) regulations) or due to a change in ownership may be eligible to claim the Job Retention Bonus in respect of employees of a previous business.
A new employer may also be eligible to claim the Job Retention Bonus 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.
To claim the bonus under these circumstances, the transferred employees must have been successfully claimed for under the CJRS by their new employer.
Stipulations re the employees being claimed for:
Employers will be able to claim for employees who:
- Were furloughed and had a Coronavirus Job Retention Scheme claim submitted for them that meets all relevant eligibility criteria for the scheme (the furloughed time period is not mentioned in current guidance so it would appear that even if they were only furloughed for a few weeks, the employee remains eligible)
- Have been continuously employed by the relevant employer from the time of the employer’s most recent claim for that employee until at least 31st January 2021
- Have been paid an average of at least £520 a month between 1st November 2020 and 31st January 2021 (a total of at least £1,560 across the 3 months)
- Have up-to-date RTI records for the period to the end of January 2021
- Are not serving a contractual or statutory notice period (that started before 1st February 2021) for the employer making a claim
These criteria must be met regardless of the frequency of the employee’s pay periods, their hours worked or rate of pay.
The average earnings earnings do not have to be split evenly across the three months but the employee must have received some earnings each calendar month.
Only earnings recorded through HMRC Real Time Information (RTI) records can count towards the £520 a month average minimum earnings threshold.
When can employers claim?
Employers will be able to claim the bonus once they have filed PAYE for January with payments being made from February 2021.
What should employers do now to make sure they can claim?
- Ensure that their employee records are up-to-date (including accurately reporting their details and wages on the Full Payment Submission (FPS) through the Real Time Information (RTI) reporting system)
- Make sure that all of their Coronavirus Job Retention Scheme claims have been correctly submitted and any necessary amendments have been made.