The Job Retention Bonus was announced by Chancellor Rishi Sunak in July as part of his Plan for Jobs. Businesses will receive a one-off payment of £1,000 for every previously furloughed employee, if they are still employed at the end of January 2021. The scheme is designed to continue to support jobs through the UK’s economic recovery from coronavirus by encouraging and helping employers to retain as many employees who’ve been on furlough as possible.
Job Retention Bonus overview
- The employer can receive £1,000 from the Government for each eligible employee
- The claim can be made through the Gov.uk portal in February 2021
- The Job Retention Bonus is taxable and should, therefore, be reflected in the business accounts
Which employers are eligible?
For an employer to be eligible for the bonus, they must have:-
- Made a legitimate claim for an eligible employee under the Coronavirus Job Retention Scheme (CJRS)
- Complied with their obligations to pay and file PAYE accurately and on time under Real Time Information (RTI) reporting system for all employees
- Kept accurate, up-to-date payroll records
- Met any HMRC requests to provide missing employee data regarding CJRS claims
- Kept up-to-date RTI records for the period to the end of January 2021
Eligible employers also include:-
- New employers where the employees were transferred under TUPE or business succession rules, as long as the new business has made a legitimate CJRS claim for those eligible employees
- Eligible employers can include recruitment agencies and umbrella companies as long as the aforementioned rules apply
Which employees are eligible?
Businesses can claim for the bonus for employees where the following conditions have been met:-
- The employee has been legitimately furloughed and a correct CJRS claim made
- The employee was in continuous employment with the eligible employer from the time of the last CJRS claim regarding them until at least 31st January 2021
- The employee earns and receives on average £520 per month between 1st November 2020 and 31st January 2021, i.e. a total of £1,560
- The above criteria must be met regardless of the frequency of the employee’s pay periods, hours worked and rate of pay
- The earnings must have been reported to HMRC via RTI
- The employee is not serving a contractual or statutory notice period that started before 1st February 2021
Other eligible employees
- Assuming the above rules apply, office holders, company directors and agency workers can be deemed to be eligible employees
- Employees on statutory parental leave and military reservists, who returned after 10th June 2020 and for whom a CJRS claim was made, are deemed eligible
- Employees on fixed term contracts, which may have been extended or renewed, and are in continuous employment, plus a CJRS claim has been made, are deemed eligible
What checks should be made?
It is important that employers keep accurate, up-to-date records and check the following details:-
- Each employee’s records are up to date
- The employee’s records have been reported on the Full Payment Submission (FPS) through RTI
- The CJRS claims have been accurately submitted and, where applicable, the amendments made in a timely manner.
If you would like to discuss the Coronavirus Job Retention Bonus and other issues relating to the CJRS, please get in touch with the team at DRG Chartered Accountants.
For further information
Gov.uk website: A Plan for Jobs 2020
Gov.uk website: Job Retention Bonus
DISCLAIMER: This information is for guidance only, and professional advice should be obtained before acting on any information contained herein. We will not accept any responsibility for loss to any person as a result of action taken or refrained from in consequence of the contents of this publication.
