Job Retention Bonus details revealed

As part of last month’s Summer Economic Update, the Chancellor announced the Job Retention Bonus, an initiative designed to encourage employers to bring employees who had been furloughed under the Coronavirus Job Retention Scheme (CJRS) back to work. The government has now revealed further details about the initiative, including who is eligible and how employers can claim. Here’s what we now know.

Eligibility criteria confirmed

All employers who furloughed one employee or more through the Coronavirus Job Retention Scheme are eligible to claim the taxable bonus of £1,000 per eligible employee, including recruitment agencies and umbrella companies. Employers can make a claim in respect of any employee who:

  • has been furloughed through the Coronavirus Job Retention Scheme for any period of time, up to the closure of the scheme on 31st October 2020
  • is brought back to continuous employment immediately after the employer stops claiming for them and remains employed until at least 31st January 2021
  • earns a minimum average salary of £520 per month between November 2020 and January 2021 (this doesn’t have to be £520 each month but must total at least £1,560 across the three-month period)
  • is not serving a contractual or statutory notice period that started before 1st February 2021 for the employer making a claim

HMRC will only count earnings that are recorded through RTI towards the £520 a month average minimum earnings threshold. More detailed guidance on what earnings can be included is expected to be published in September 2020. In the meantime, you can read more about the eligibility criteria for the Job Retention Bonus on the government’s website.

Limited company directors can be included in a claim

Limited companies can claim for company directors who return to work from furlough, provided that they are employees of the company and that they meet the eligibility criteria outlined above.

No limit on the number of claims an employer can make

There is no limit to the number of eligible employees that employers can claim for, so a business that has brought back 50 eligible employees, for example, will be entitled to make 50 claims. The Chancellor, Rishi Sunak, has said, “if employers bring back all nine million people who have been on furlough, this would be a £9 billion policy to retain people in work.

Payments will begin in February 2021

Employers will be able to start making Job Retention Bonus claims through the government’s website after they have filed PAYE for January 2021. The government will begin making payments from February 2021.

To stay up to date with the latest news regarding the coronavirus crisis and its impact on small businesses, take a look at our small business coronavirus hub.

Disclaimer: The content included in this blog post is based on our understanding of tax law at the time of publication. It may be subject to change and may not be applicable to your circumstances, so should not be relied upon. You are responsible for complying with tax law and should seek independent advice if you require further information about the content included in this blog post. If you don't have an accountant, take a look at our directory to find a FreeAgent Practice Partner based in your local area.

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