New guidance has been released on the Job Retention Bonus which has been launched to support employers who have kept staff on beyond furlough.
What is the Job Retention Bonus?
The Job Retention Bonus is a £1,000 one-off taxable payment to you (the employer), for each eligible employee that you furloughed and kept continuously employed until 31 January 2021. You do not have to pay this money to your employee.
Is it different to the Job Support Scheme?
The bonus works alongside the Job Support Scheme, and in addition to other loans and grants. So employers can claim both the Job Support Scheme and the Job Retention Bonus.
Do employees have to have been furloughed?
Yes, the retention bonus only applies to those employees who have been brought back from furlough. They must still be employed by the business until the start of February 2021.
Who is eligible?
You can claim the bonus if you’re an employer who has furloughed employees and made an eligible claim for them through the Coronavirus Job Retention Scheme. Your employee must have been eligible for the Coronavirus Job Retention Scheme grant for you to be eligible for the bonus.
If you have repaid Coronavirus Job Retention Scheme grant amounts to HMRC
You cannot claim the bonus for any employees that you have not paid using the Coronavirus Job Retention Scheme grant because you have repaid all the grant amounts you claimed for them. This applies regardless of the reason why you repaid the grant amounts.
You can claim for employees that:
- you made an eligible claim for under the Coronavirus Job Retention Scheme
- were continuously employed from the end of the claim period of your last Coronavirus Job Retention Scheme claim for them, until 31 January 2021
- are not serving a contractual or statutory notice period for you on 31 January 2021 (this includes people serving notice of retirement)
- you paid enough an amount in each relevant tax month and enough to meet the Job Retention Bonus minimum income threshold.
If HMRC are still checking your Coronavirus Job Retention Scheme claims, you can still claim the Job Retention Bonus but your payment may be delayed until those checks are completed.
HMRC will not pay the bonus if you made an incorrect Coronavirus Job Retention Scheme claim and your employee was not eligible for the Coronavirus Job Retention Scheme.
Employees who have been transferred to you under TUPE or due to a change in ownership
You may be eligible to claim the Job Retention Bonus for employees of a previous business which were transferred to you if:
- TUPE rules applied
- the PAYE business succession rules applied
- the employees were associated with the transfer of a business from the liquidator of a company in compulsory liquidation where TUPE would have applied if the company was not in compulsory liquidation
To claim the Job Retention Bonus for employees that have been transferred to you, you must have furloughed and successfully claimed for them under the Coronavirus Job Retention Scheme, as their new employer. The employees must also meet all the relevant eligibility criteria for the Job Retention Bonus.
This means that you will not be able to claim the Job Retention Bonus for any employees who are transferred to you after the Coronavirus Job Retention Scheme closes on 31 October 2020.
Claiming for an individual who’s not an employee
You can claim the Job Retention Bonus for individuals who are not employees, such as office holders or agency workers, as long as you claimed a grant for them under the Coronavirus Job Retention Scheme and the other Job Retention Bonus eligibility criteria are met.
Check out the government guidance on the minimum income threshold.
How do you claim?
Claims need to be made between 15 February and 31 March 2021. This can be done via the government website. You cannot claim before the 15 February.
Before you can claim the bonus, you will to need to have reported all payments made to your employee between 6 November 2020 and 5 February 2021 to HMRC through Full Payment Submissions via Real Time Information (RTI).
There are some steps you need to take now to make sure you’re ready to claim.
- still be enrolled for PAYE online
- comply with your PAYE obligations to file PAYE accurately and on time under Real Time Information (RTI) reporting for all employees between 6 April 2020 and 5 February 2021
- keep your payroll up to date and make sure you report the leaving date for any employees that stop working for you before the end of the pay period that they leave in
- use the irregular payment pattern indicatorin Real Time Information (RTI) for any employees not being paid regularly
- comply with all requests from HMRC to provide any employee data for past Coronavirus Job Retention Scheme claims
For full details of the scheme click here.