Coronavirus Job Retention Bonus
Details of how jobs will be protected through the government’s new Job Retention Bonus were published by HMRC on 31 July 2020 and updated on 2 October
- The bonus payment will be made to employers not the employee
- These employees must remain continuously employed to the end of January 2021
- Employees must earn on average at least the NI lower earnings limit for November to the end of January
- Those who are serving notice for redundancy will not be eligible for the bonus where the notice period started before 31 January 2021
The scheme encourages employers to continue to employ furloughed staff by providing businesses with a one-off payment of £1,000 for every previously furloughed employee if they’re still employed by 31 January 2021.
Employers will be able to claim the Job Retention Bonus through GOV.UK from 15 February 2021.
- The payment will be made to employers for every employee who has previously been furloughed under the Coronavirus Job Retention Scheme (CJRS).
- Employees include office holders, directors and agency staff.
- These employees must remain continuously employed to the end of January 2021.
- Employees must earn at least £520 (the National Insurance lower earnings limit) a month on average between 1 November 2020 and the 31 January 2021, so a total of at least £1,560 over the 3 months.
- Those who were furloughed and had a claim submitted for them after the 10 June (when the CJRS closed to new entrants), because they were returning from paternal leave or time serving as a military reservist will also be eligible for the bonus as long as they meet the other eligibility criteria.
- Employers will also be eligible for employee transfers protected under TUPE legislation, provided they have been continuously employed and meet the other eligibility criteria and the new employer has also submitted a CJRS claim for that employee.
- Those who are serving notice for redundancy will not be eligible for the bonus where the notice period started before 31 January 2021.
Which employers are eligible?
An employer will be able to claim the Job Retention Bonus for any employees that were eligible for the Coronavirus Job Retention Scheme and they have claimed a grant for. Where a claim for an employee was incorrectly made, a Job Retention Bonus will not be payable.
All employers with a UK bank account are eligible for the scheme including recruitment agencies and umbrella companies.
What do employers have to do now?
Employers should ensure that their employee records are up to date, including accurately reporting their employee’s details and wages through the Real Time Information (RTI) reporting system. Employers should also make sure all their Coronavirus Job Retention Scheme claims have been accurately submitted and any amendments notified to HMRC.
The information provided is based on our current understanding of the relevant legislation and regulations and may be subject to alteration as a result of changes in legislation or practice. Also it may not reflect the options available under a specific product which may not be as wide as legislations and regulations allow.
All references to taxation are based on our understanding of current taxation law and practice and may be affected by future changes in legislation and the individual circumstances of the investor.