On the 8th July Chancellor Rishi Sunak as part of his ‘Plan for Jobs’ announced a new employer incentive in the form of the Job Retention Scheme (JRS) Bonus. Further guidance on the Bonus scheme has been published today, 31 July, and is set out below.
Who can claim the Job Retention Bonus?
Any employer (including recruitment agencies and umbrella companies) who has placed any member of staff, at any time, on furlough under the Coronavirus Job Retention Scheme and has subsequently received government funding is eligible for the JRS bonus. Where it has been realised or subsequently discovered that an employee claim was incorrect, then the JRS bonus will not be payable for that employee. Further, HMRC will withhold payment of the JRS bonus where it believes there is a risk that there have been fraudulent claims under CJRS.
How much is the Job Retention Bonus?
This is a one-off payment of £1000 per eligible employee. The bonus is subject to tax and businesses should therefore treat the whole amount as income for the purposes of calculating taxable profits for Corporation Tax or Self-Assessment.
What should employers be doing now to prepare for the claim?
- Make sure they are keeping employee records up to date
- Ensure they are complying with their PAYE obligations under the RTI scheme
- Accurately report employee details and wages on the Full Payment System via the RTI reporting system
- Ensure all previous CJRS claims have been accurately submitted, and any necessary amendments, including under or over payments, have been notified to HMRC
- Maintain enrolment for PAYE online
- Have a UK bank account
- Keep their payroll accurate and up to date
- Respond to any requests from HMRC to provide missing employee data in respect of historic Coronavirus Job Retention Scheme claims.
Can employers claim the JRS bonus for employees who have been transferred under TUPE, or as a result of a change in ownership?
Where employees of a previous business have been transferred to the new employer under TUPE, or where the PAYE business succession rules apply, then employers will be eligible to make a claim for those employees. This also applies to employees where a business has been transferred by a liquidator in the event of a compulsory liquidation, where TUPE would ordinarily have applied had it not been for the compulsory liquidation. The transferred employees in the above circumstances must have been furloughed and successfully claimed for under the CJRS by their new employer, and the TUPE transfer must have taken place prior to 31 October 2020.
For what type of employees can an eligible employer claim the JRS Bonus?
Employers can claim the JRS Bonus for each employee who meet the following criteria:
- Were furloughed and had a CJRS claim submitted for them that met all relevant eligibility criteria
- Have been continuously employed by the employer from the time of the employer’s most recent claim for them, until at least 31 January 2021
- Have been paid an average wage of at least £520 per month (i.e. minimum wage threshold) between 1 November 2020 and 31 January 2021 (or a total of £1560 for the three months) and those earnings have been paid and reported to HMRC via RTI
- Have an up to date RTI record for the period to the end of January 2021
- Are not serving out a contractual or statutory notice period that started prior to 1 February 2021.
The above criteria also applies to office holders, company directors and agency workers, including those employed by umbrella companies. The criteria must be satisfied irrespective of the frequency of the employee’s pay periods, their hours worked and rate of pay.
What type of earnings can be included in the average monthly wage of £520?
Only earnings that have been recorded through the RTI system are eligible.
Can I claim for employees who have returned from statutory parental leave?
Yes. Employers can claim for employees who have returned from maternity, paternity or adoption leave who returned after 10 July 2020 and were subsequently placed on furlough, providing they satisfy the above eligibility criteria. This also applies to military reservists returning to work.
Are employees who are on fixed term contracts eligible for JRS Bonus?
Yes, providing they were claimed for under the scheme, and the above eligibility criteria are met. Contracts that have been extended or renewed will not negate eligibility, providing continuous employment is maintained.
When and how do we claim the JRS Bonus?
Employers will be able to claim the bonus online via the .gov website from February 2021.
Further information is expected from HMRC in September and we will update this guidance then.