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Job Retention Bonus – the detail

Posted on: August 3rd, 2020 by Ginny Hallam

Following the ‘Plan for Jobs’ announcement earlier this month, we now have further detail on how the Job Retention Bonus will work in practice.

You’ll be entitled to a one-off payment of £1,000 for every eligible employee previously claimed for under the Job Retention Scheme. You’ll be able to claim the bonus after you’ve filed PAYE for January 2021 and payments will be made to you from February 2021.

Who is an eligible employee?

  1. They must have previously been furloughed and had a claim submitted for them through the Coronavirus Job Retention Scheme (CJRS);
  2. They need to have been continuously employed by you from the time of your most recent CJRS claim for that specific employee, until at least 31 January 2021;
  3. The need to earn at least £520 a month on average between 1 November 2020 and 31 January 2021 (£1560 total). They do not need to receive £520 each month, but must receive some earnings in each of the three calendar months that have been paid and reported to HMRC;
  4. They must not be serving a contractual or statutory notice period that started before 1 February 2021;
  5. Providing the above has been met, you can claim for:
    1. Office holders and company directors;
    2. Agency workers;
    3. Those on fixed-term contracts;
    4. Those on statutory parental leave who returned after 10 June 2020 and have been furloughed.

What earnings will be included for the £520 monthly calculation? 

Detailed guidance will be published in September 2020. We’ll update you as soon as we have the detail.

What can you do now if you intend to access the bonus? 

  1. Make sure employee records are up-to-date, including accurate reporting of details and wages on the Full Payment Submission through the Real Time Reporting system;
  2. Make sure all CJRS claims have been accurately submitted and any necessary amendments have been notified to HMRC.

Tax

The Job Retention Bonus will be taxable, so you’ll need to include the whole amount as income when calculating taxable profits for Corporation Tax or Self-Assessment.

 

This update is accurate on the date it was sent (3 August 2020), but may be subject to change which may or may not be notified to you. This update is not to be taken as advice and you should seek advice if anything contained within affects you or your business.