Earlier this month the government published details of the Job Retention Bonus. This bonus was originally announced in July and, like the furlough scheme and its successor, the Job Support Scheme, is aimed at supporting jobs while businesses continue to recover from the impact of the coronavirus.
What is the Job Retention Bonus?
It is a one-off taxable payment of £1000 which is available in respect of every employee you furloughed and who you still employ on 31 January 2021.
Does the size of the bonus vary according to how much the employee is paid?
No. The bonus is a fixed payment of £1000 irrespective of the employee’s earnings.
What are the eligibility criteria for each employee?
First, you must have successfully claimed a grant in relation to the employee through the coronavirus job retention scheme (CJRS). The employee need not have been furloughed for the entire duration of the furlough scheme so long as they have been furloughed at some point.
The employee must have been continuously employed from the end of the last claim that you made for them under the Coronavirus Job Retention scheme and remain employed on 31 January 2021.
Thirdly, (and arguably most importantly) you must pay a salary to the employee of at least £1,560 (gross) in total throughout the forthcoming tax months:
– 6 November 2020 to 5 December 2020
– 6 December 2020 to 5 January 2021
– 6 January to 5 February 2021
You must pay the employee at least one payment of taxable earnings (of any amount) in each of the above tax months.
Useful examples have been provided in government guidance to help businesses decide which employees meet the minimum income threshold. Only payments recorded as taxable pay will count towards the minimum income threshold, so it is worth referring to this resource when considering making a claim:
What if the employee is under notice on 31 January 2021?
You cannot claim a bonus for any employee who has given you notice or who you have served with notice to terminate on or before 31 January 2021. This includes a notice of retirement.
Is the bonus just available for employees?
The bonus is available for individuals who are not employees, such as office holders (for example, directors) and agency workers providing that you claimed a grant for them under the CJRS and the other criteria are met (the earnings criterion and the requirement that they remain working for you on 31 January 2021).
Can I claim the bonus for employees who go onto the new Job Support Scheme?
Yes. You can still claim the bonus for an employee even if you intend to make a claim in respect of them through the new job Support scheme that is commencing on 1 November 2020.
Who is the bonus paid to?
The bonus is paid by HMRC and it is paid to the business, not to the individual employees. You do not have to pay the bonus over to the employee.
How and when do I make a claim?
You need to submit a claim for the bonus between 15 February 2021 and 31 March 2021. We do not know yet how employers will make the claim – further guidance is to be provided by 31 January 2021. No claims will be accepted after the deadline of 31 March 2021.
What steps do I need to take before I can claim the bonus?
- You must remain enrolled for PAYE online when the time comes to make the claim.
- You will need to continue to file PAYE accurately and on time under Real Time Information reporting for all employees between 6 April 2020 and 5 February 2021.
- You must comply with any requests for information from HMRC for past CJRS claims.