On 5 November, the Chancellor announced that employers would now not be entitled to the previously announced £1,000 Job Retention Bonus for every furloughed employee retained in employment until at least 31 January 2021. This is because the furlough scheme has been extended. It was announced that 'we will redeploy a retention incentive at the appropriate time.'
The Chancellor announced the Job Retention Bonus of £1,000.
The second ‘flexible furlough’ stage of the CJRS was to come to an end on 31 October 2020. It is now extended to 31 March 2021. The Job Support Scheme was to be introduced from 1 November 2020.
To reward and incentivise employers who bring back to work furloughed employees, employers will receive a £1,000 payment per employee. This does not need to be passed on to the employee.
The Job Retention Bonus 'JRB' can be claimed for employees, officeholders, company directors and agency workers, including those employed by umbrella companies.
The one-off amount of £1,000 will be paid to employers for each employee who has been furloughed at some stage under the CJRS; earns at least £520 pm on average for November, December 2020 and January 2021, and a total of at least £1,560 across the three months, and has been continuously employed by the employer until at least 31 January 2021.
An employee must be paid at least once in each of the three tax months from 5 December to 5 February 2021. Therefore, if an employee is paid nothing in November and then works in December and January, earning £2,000 in the latter two months then the employer would not be eligible for the bonus for that employee. Although the employee had meets the minimum income threshold, of £1,560 over three months, they had not received a salary payment in each tax three months.
There are a number of exclusions to receiving the JRB. These include that no employee is placed on contractual or statutory notice of termination of their employment at any point before 31 January 2021. This includes the employee leaving due to retirement, and not just redundancy. If an RTI payroll leaving date is reported to HMRC for an employee on or before 31 January 2021 they will also be excluded from the JRB.
Under the CJRS, HMRC would ‘pay now, check later’ to ensure that businesses had the funds to make the salary payment to their staff. However, with the JRB, HMRC will move to a ‘check first, pay later’ model. HMRC with therefore be checking and validating RTI data before making the JRB payment.
Employers will be able to claim the bonus from February 2021 once all payroll RTI data to 31 January 2021 has been submitted to HMRC.
The scheme will not open for claims until 15 February 2021, and employers will have until 31 March 2021 to make a claim after which the scheme will close. No further claims will be accepted after this date.
HMRC say that in preparation for making a claim that the employer must file all their RTI returns accurately and file them on or before the contractual payment date for the whole of the 2020/21 tax year i.e. not just the relevant three months.
As with other Coronavirus grants, the JRB will form part of the taxable income of the employer and be subject to Corporation and Income Tax as applicable.
The guidance will be updated with details on how to access the online claim service.