Last reviewed 13 October 2020
The Chancellor of the Exchequer, Rishi Sunak, released his “Plan for Jobs” on 8 July 2020 to set out how the Government will support economic recovery in the UK. One of the elements included was a new Job Retention Bonus (JRB) to provide additional support to employers who keep on their furloughed employees in meaningful employment, after the Government’s Coronavirus Job Retention Scheme ends on 31 October 2020.
More detailed guidance was released on 2 October 2020.
Which employers can claim it?
All employers who furloughed staff are eligible for the JRB including recruitment agencies and umbrella companies.
Employers should ensure that they have:
complied with their obligations to pay and file PAYE accurately and on time under the Real Time Information (RTI) reporting system for all employees
maintained enrolment for PAYE online
a UK bank account.
Failure to maintain accurate payroll data may jeopardise a claim so it is important that you keep your payroll up to date and address all requests from HMRC to provide missing employee data in respect of historic Job Retention Scheme claims.
How much is the bonus?
It is a one-off payment of £1000 for every furloughed employee who meets the criteria set out above. If you have furloughed many staff who meet the criteria, the bonus could total several thousands of pounds.
Is the bonus taxable?
Yes. If you receive the JRB, you must include the whole amount as income when calculating your taxable profits for Corporation Tax or Self-Assessment.
Individuals with employees who are not employed as part of a business, such as nannies or domestic staff, will not have to pay tax on grants received under the scheme.
Is there a limit on the amount of employees I can claim for?
There is no limit on the number of employees who can be claimed for, although employees must meet certain qualifying criteria.
Is there a limit on the size of employer who can claim the bonus?
No, there does not appear to be at this stage.
Which employees can I claim the bonus for?
Employees must be eligible for the Job Retention Scheme and you must have claimed a grant from the Scheme for them. Although Government guidance refers to “employees”, it confirms that the JRB can be claimed for people who are not employees, including office holders, company directors and agency workers, which includes those employed by umbrella companies. The JRB can be claimed for employees who:
were furloughed and had a Job Retention Scheme claim submitted for them that meets all relevant eligibility criteria for the scheme
have been continuously employed by you from the time of your most recent claim to the Job Retention Scheme for that employee until at least 31 January 2021
have been paid a total of at least £1560 (gross) throughout the tax months of 6 November to 5 December 2020, 6 December 2020 to 5 January 2021 and 6 January to 5 February 2021; employees must have at least one payment of taxable earnings in each of the relevant months
are not serving a contractual or statutory notice period that started before 1 February 2021, including notice of retirement, for the employer making a claim.
Can I claim the bonus for those categories of people who were excluded from the 10 June “first time furlough” cut off date?
Yes. The Job Retention Scheme included a cut-off date on 10 June 2020 after which no employee could be furloughed for the first time. Those on maternity, paternity, adoption, shared parental or parental bereavement leave which started before and ended after 10 June were exempt from the cut off, as were those employees who were on a period of mobilisation with the Reserve Forces which started before and ended after 10 June. Employers can claim the JRB in relation to these employees whose furlough started after 10 June 2020 provided they meet all other criteria.
Are the rules any different for fixed-term employees?
You can claim the JRB for employees on fixed-term contracts that are extended or renewed provided that continuity of employment is not broken and all other criteria are met.
I transferred some employees to my business under TUPE recently, can I claim the bonus for these employees?
You will be able to claim the JRB for employees who were transferred to you under TUPE law provided that you, as the new employer, furloughed the employee and successfully made a claim to the Job Retention Scheme for them.
This also applies to employees of a previous business who transferred to the new employer where the PAYE business succession rules applied to the change of ownership.
In both cases, the employees must have transferred on a date which falls by the end of the Job Retention Scheme, ie by 31 October 2020. You cannot claim the JRB for any employee who transferred after 31 October 2020.
What earnings count towards the minimum earnings limit?
Only payments recorded as taxable pay will count towards the minimum earnings threshold. Taxable pay is reported as a single figure through Full Payment Submissions via Real Time Information. Statutory payments, eg Statutory Sick Pay count towards taxable pay.
When can I claim the bonus?
Claims can only be made between 15 February to 31 March 2021; after this date no further claims will be accepted. More guidance will be published at the end of January 2021 with details on how to access the claim service.
Can I claim the bonus if HMRC are still checking my Job Retention Scheme claim?
You will still be able to make the claim for the Job Retention Bonus where HMRC are in the process of checking your Job Retention Scheme claim; however, payment of the bonus may be delayed until these checks are completed.
HMRC will not pay the bonus if you made an incorrect claim and your employee was not eligible for the Job Retention Scheme.
Can I claim the bonus if I have repaid Job Retention Scheme grants?
No. You will not be able to claim the bonus for any employees not paid using the Job Retention Scheme because you repaid all grant amounts claimed for them. This applies regardless of the reason for the repaying of the grants.
Can I use an agent to claim the bonus for me?
Yes, if you use an agent who is authorised to do PAYE online for you. Further guidance on this will follow by the end of January 2021.
Is there anything which may prevent the bonus being paid to me?
HMRC will withhold payment of the JRB where it believes there is a risk that Job Retention Scheme claims may have been fraudulently claimed or inflated, until they have completed an enquiry.
Where a claim to the Job Retention Scheme was incorrectly made, the JRB will not be paid.
What should I do to prepare for claiming the bonus?
You should make sure your employee records are up-to-date, and are accurately reporting your employees’ details and wages on the Full Payment Submission (FPS) through the Real Time Information (RTI) reporting system. You should also make sure all of your claims to the Job Retention Scheme have been accurately submitted and that you have notified HMRC of any necessary amendments to your claims.
Will using the Job Support Scheme prevent me claiming the bonus?
No. The Government has confirmed that use of the Job Support Scheme, set to replace the Job Retention Scheme from 1 November 2020, will not prevent you claiming the Job Retention Bonus if you are eligible to do so.
What should I do to prepare for claiming the bonus?
You should make sure your employee records are up to date, your payroll is up to date and that you are accurately reporting details and wages on the Full Payment Submission (FPS) through the Real Time Information (RTI) reporting system for all employees between 6 April 2020 and 5 February 2021.
You should also make sure all of your claims to the Job Retention Scheme have been accurately submitted and that you have notified HMRC of any necessary amendments to your claims.
The leaving dates for any employees who stop working for you before the end of a pay period that they leave in should be reported, and the irregular payment pattern indicator in RTI should be used for any employees not being paid regularly.