Government publishes more information on the Job Retention Bonus

Job retention scheme

Please Note: All information was correct at time of writing on 12 October 2020. We do our very best to make sure our information is as up to date as possible, but we’d encourage you to check out our latest articles and to check the government website for updates as they happen.

Following the announcement of the Job Retention Bonus back in July, and initial details of the bonus released in August, the government published more information on the Job Retention Bonus earlier this month.

Here, we’ll take a look at an overview of the bonus, who is eligible and how businesses can make a claim.

What is it?

The Job Retention Bonus (JRB) is a £1,000, on-off taxable payment to employers for each eligible employee they furloughed and kept continuously employed from the date of the last furlough claim they made for them until 31 January.

Eligible employees

Employers can make a claim for the JRB in respect of any employee who:

  • was the subject of an eligible claim by the employer under the furlough scheme
  • has been continuously employed since the end of the claim period for the last furlough claim made for them until 31 January 2021
  • is not serving a contrctual or statutory notice period on 31 January 2021 (this seems to be regardless of whether it was the employer or employee who gave notice)
  • was paid an amount in each relevant tax month and meets the scheme's minimum income threshold (see below)

What is the minimum income threshold?

Eligible employees must be paid a total of at least £1,560 (gross) throughout the tax months:

  • 6 November to 5 December 2020
  • 6 December 2020 to 5 January 2021
  • 6 January to 5 February 2021

The size of the monthly payments can vary but the employee must be paid at least one payment of taxable earnings (of any amount) in each of the above tax months (SSP is taxable pay).

The minimum income threshold criteria applies regardless of how often employers pay their employees or any circumstances that may have reduced their pay in the relevant tax months, such as being on statutory leave or unpaid leave. HMRC will check that employees have been paid at least the minimum income threshold by checking the information submitted via Real Time Information (RTI).

TUPE

An employer can claim the JRB for an employee who has transferred to them if:

  • the 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 liquidation)
  • the new employer must have made an eligible claim for the employee under the furlough scheme
  • the employee meets all the usual criteria for eligibility

An employer cannot make a claim for the JRB in relation to an employee who transfers to them after the furlough scheme ends on 31 October.

Can you claim for a worker?

HMRC’s guidance states that employers can claim JRB for people other than employees such as workers and agency staff if they submitted a successful claim for them under the furlough scheme and they meet the other eligibility criteria. This is surprising given that true workers cannot be said to be ‘continuously employed’.

Repayment of furlough grant

If an employer repaid the furlough monies paid in respect of an employee to HMRC, they’re not entitled to claim the JRB for that employee, regardless of the reason for making the repayment.

When can you claim?

Employers can claim the bonus between 15 February 2021 and 31 March 2021.

If HMRC are still auditing an employer’s furlough claims, they can still claim the bonus but payment may be delayed.

Getting ready to claim

In order to claim the employer must:

  • still be enrolled for PAYE online
  • comply with PAYE obligations to file PAYE accurately and on time under RTI reporting for all employees between 6 April 2020 and 5 February 2021
  • keep payroll up to date and report the leaving date for any employees that stop working before the end of the pay period that they leave in
  • use the irregular payment pattern indicator in RTI for any employees not being paid regularly
  • comply with any requests received from HMRC to provide any details required under the furlough scheme

The guidance states that supplemental guidance will be issued in January 2021 giving further details on how to submit a claim online.

 

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These are challenging times, especially for employees, business owners and employers. Our team of HR and Employment Law experts provide you with the latest government news to help you work through this difficult period.

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