The government has published further guidance on the Job Retention Bonus, originally announced in July 2020
The scheme, which has been introduced to support employees throughout the Covid-19 pandemic, gives organisations an incentive to bring back as many employees as possible from furlough.
This one-off £1,000 taxable payment to you (the employer), is paid out for each eligible employee that you furloughed and kept continuously employed until 31 January 2021.
You’ll be able to claim the bonus between 15 February 2021 and 31 March 2021 and you do not have to pay this money to your employee.
Who can claim? You can claim the Job Retention Bonus if you have employees that:
- You made an eligible claim for under the Coronavirus Job Retention Scheme
- You kept 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 in each relevant tax month and enough to meet the Job Retention Bonus minimum income threshold
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.
If you have employees who have been transferred to you under TUPE or due to a change in ownership, click here to read specific guidance.
The minimum income thresholdTo be eligible for the job retention bonus you must make sure that your employees have been paid at least the minimum income threshold.
To meet the minimum income threshold you must pay your employee a total of at least £1,560 (gross) throughout the following tax months:
- 6 November to 5 December 2020
- 6 December 2020 to 5 January 2021
- 6 January to 5 February 2021
You must also pay your employee at least one payment of taxable earnings (of any amount) in each of the relevant tax months. The minimum income threshold criteria apply regardless of how often you pay your employees.
Any circumstances that may have reduced your employee’s pay in the relevant tax periods, such as being on statutory leave or unpaid leave
Are you making redundancies?You must comply with the normal rules for redundancy, which include using fair redundancy criteria. Please ensure you adhere to these rules, even if it means that fewer of your employees are eligible for the Job Retention Bonus.
When can you claim?You can make your claim from 15 February 2021. Prior to making your claim, remember to report 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).
To make sure you’re ready to claim, you must ensure the below:
- You’re enrolled for PAYE online
- You comply with your PAYE obligations to file PAYE accurately and on time under Real Time Information reporting for all employees between 6 April 2020 and 5 February 2021
- Keep your payroll up to date, remembering to 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 indicator in Real Time Information 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
What about tax?You must include payments you receive under the scheme as income when you calculate your taxable profits for Income Tax and Corporation Tax purposes.
Your business can deduct employment costs as normal when calculating taxable profits for Income Tax and Corporation Tax purposes.
How long is the Job Retention Bonus available?You will have until 31 March 2021 to make a Job Retention Bonus claim after which the scheme will close.
Get in touch with Oldfield Advisory, who will be able to help with your queries regarding the Job Retention Bonus. Click here to send a message to a member of the team.