Further information on the Job Retention Bonus
Following on from the Chancellor’s “Plan for Jobs”, the government has now published a policy paper containing further information about its new Job Retention Bonus (JRB). What should you do now if you intend to claim the JRB and what is the key issue not to overlook?
The JRB is a one-off flat rate payment of £1,000 for every eligible employee that is claimed for, so if you have 50 eligible employees, you can claim £50,000. You will be able to claim the JRB for any furloughed employees that were eligible for the Coronavirus Job Retention Scheme (CJRS) and that you claimed a CJRS grant for. You should ensure that you have complied with your obligations to pay and file PAYE accurately and on time under the Real Time Information (RTI) reporting system for all employees, have maintained enrolment for PAYE online and have a UK bank account. However, HMRC will withhold payment of the JRB where it believes there is a risk that CJRS claims may have been fraudulently claimed or inflated, until the enquiry is completed.
You will be able to claim for employees who:
were furloughed and had a CJRS claim submitted for them that meets all relevant eligibility criteria for the CJRS (including those who returned from statutory parental leave, military reservists who returned to work and those on fixed-term contracts)
have been continuously employed from the time of your most recent CJRS 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, i.e. a total of at least £1,560 across the three months - the employee doesn’t 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.
You will be able to claim the JRB after you’ve filed PAYE for January 2021, and payments will be made from February 2021. The JRB will be taxable, so you must include the total amount as income when calculating your taxable profits for corporation tax or self-assessment.
Detailed guidance will be published in September 2020 on what earnings can be included in the £520 a month average minimum earnings threshold and on the JRB claims process.
Ensure that your employee records are up to date, including accurately reporting your employee’s details and wages through the RTI reporting system. You should also make sure all of your CJRS claims have been accurately submitted and any necessary amendments have been notified to HMRC. You won’t get the JRB if the employee is serving a notice period that started before 1 February 2021, even if they’re still employed by you on 31 January 2021. However, there’s seemingly nothing to prevent you being in the process of redundancy consultation on 31 January 2021, provided no notices of termination have been issued by then, albeit that it goes somewhat against the spirit of the scheme.