The Coronavirus Job Retention Scheme (JRS) has proved invaluable for countless employers during the Covid-19 pandemic. The scheme paying up to 80% of employees’ wages will close at the end of October and will no longer accept claims for past periods after the end of November.
Please note, following further annoucements on 5 November, the Job Retention Bonus will no longer be paid in February, as the Coronavirus Job Retention Scheme has been extended until the end of March 2021.
Nevertheless, employers who retain in continuous employment those employees who were previously furloughed and were included on at least one JRS claim, will be able to claim a Job Retention Bonus of £1,000 per employee.
Main points about the bonus:
• The Bonus is payable to the employer and does not have to be passed to the employee
• The Bonus is a one-off taxable payment of £1,000 per eligible employee
• You must include the Bonus payments as income when calculating taxable profits for income tax and corporation tax purposes
• There will be a six week window from 15 February to 31 March to make the Bonus claim
• You can still claim the Job Retention Bonus even if you also use the new Job Support Scheme; they are not mutually exclusive
Who can claim?
• You can claim if you are an employer who has furloughed employees and made an eligible claim for them though the Coronavirus Job Retention Scheme
• You must have used the money claimed for the Job Retention Scheme to pay the employees; if you returned the money to HMRC regardless of the reason, you will not be eligible for the Bonus payment
Which employees can you claim for?
• Any employee you made an eligible claim for using the Coronavirus Job Retention Scheme
• Employees kept in continuous employment from the end of the last claim you made under the scheme until 31 January 2021
• Employees must not be serving contractual or statutory notice of termination on 31 January including notice of retirement
• Employees must meet the minimum income threshold for the period from November 2020 to January 2021
• You may also be eligible to claim as the new employer for any employees transferred to you under TUPE Regulations. You must have furloughed and made an eligible claim in respect of these employees under the scheme; if the TUPE transfer only happened after the Job Retention Scheme has closed you will not be eligible for the Bonus in respect of these employees.
The minimum income threshold
To be eligible for the Bonus, you must make sure that the employees have been paid at least the minimum income threshold.
• You must pay the employee a total of at least £1,560 (gross) through the three tax months from 6 November 2020 to 5 February 2021
• You must pay each employee at least one payment of taxable earnings in each tax month
• Only payments recorded as taxable pay will count towards the minimum income threshold
• These criteria apply regardless of how often you pay your employees and regardless of any circumstances that have reduced your employees’ pay (such as unpaid leave or statutory leave)
• The information about payments must be reported though Full Payment Submissions via Real Time Information (RTI); this information will be checked to ensure the employees have been paid in line with the minimum income threshold
If you need further help with deciding which employees meet the threshold, you can consult the Government published document with examples accessible here.
Get ready to claim
You must comply with your PAYE obligations to file PAYE accurately and on time under RTI reporting for all employees between 6 April 2020 and 5 February 2021. Further details of the claim process will be published in January 2021. If you have previously used an agent authorised to act on your behalf for PAYE purposes to prepare and submit your JRS claims, they will be able to claim the JRS Bonus on your behalf. We are awaiting further guidance to be released by the end of January 2021 with details on how agents can claim the bonus. In the meantime, please let us know if you would like us to prepare and submit the Bonus claim on your behalf.
For further information you can read the full Government guidance.
The newly-published Treasury Direction gives legal effect to the JRB. This includes the modifications to the CJRS and sets out the detail of how the JRB will work.
For more information and to discuss how we can help you, please contact a member of the HR Consultancy Team.