Job Retention Bonus details announced

The Government has set out how they will support economic recovery in the UK, including a new Job Retention Bonus (JRB). The JRB is to provide additional support to employers who keep their furloughed employees in meaningful employment, after the Coronavirus Job Retention Scheme (furlough scheme) ends on 31 October 2020. Guidance was published by the Government on 31 July 2020 and more information is set to be released in September 2020.

A one-off payment of £1000 is payable, for every furloughed employee who meets the criteria set out below, from February 2021. If employers have furloughed many staff who meet the criteria, the bonus could total several thousands of pounds. The whole amount must be included as income when calculating taxable profits for Corporation Tax or Self-Assessment.

All employers who furloughed staff are eligible for the JRB including recruitment agencies and umbrella companies. There are currently no limits to the size of employer or number of employees to be claimed for, but 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
• a UK bank account

Failure to maintain accurate payroll data may jeopardise a claim so it is important that employers keep payroll up to date and address all requests from HMRC to provide missing employee data in respect of historic furlough claims.

Employees must be eligible for the furlough scheme and employers must have claimed a grant from the scheme for them to be eligible. Government guidance says that this includes office holders, company directors and agency workers, including those employed by umbrella companies.

The JRB can be claimed for employees who:

• were furloughed and had a furlough claim submitted for them that meets all relevant eligibility criteria for the scheme
• have been continuously employed from the time of the most recent claim for that employee until at least 31 January 2021
• have been paid an average of at least £520 a month between 1 November 2020 and 31 January 2021 (a total of at least £1,560 across the 3 months). The employee does not have to be paid £520 in each month, but must have received some earnings in each of the three calendar months that have been paid and reported to HMRC via RTI

• 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 1 February 2021, for the employer making a claim.

Employers will be able to claim the JRB for employees who were transferred under TUPE law, provided that the new employer furloughed the employee and successfully made a claim to the furlough scheme for them.

Employers should make sure employee records are up-to-date and are accurately reporting staff details and wages on the Full Payment Submission (FPS) through the RTI reporting system.

Suggested Resources