Written by Brabners LLP
Three weeks after Rishi Sunak’s introduction of the Government’s ‘Plan for Jobs’ in a speech to the House of Commons on 8 July, HMRC released a policy paper setting out further details of the Job Retention Bonus (‘JRB’) announced in the Chancellor’s speech. The JRB is intended as an incentive for employers who furloughed staff under the Coronavirus Job Retention Scheme (‘CJRS’) to maintain their workforce after the scheme comes to an end on 31 October 2020.
What is the JRB?
The JRB is a one-off payment of £1,000 made by the Government to employers for every worker whose wages the employer claimed for under the CJRS. The payment is taxable (businesses should include the whole amount as income when calculating their taxable profits), and will only be available in relation to those individuals who remain continuously employed with their employer until 31 January 2021. The Government’s intention is that this delayed financial reward will encourage employers to retain staff, which it is hoped in turn will stem the somewhat inevitable rise in redundancies following the end of the CJRS.
Which employers are eligible?
All employers are eligible for the scheme (including umbrella companies and recruitment agencies), as long as they claimed through the CJRS in a compliant, non-fraudulent manner. Payment will be withheld where HMRC believes there is a risk that claims have been fraudulently lodged or inflated.
Who can employers claim in respect of?
Employers will be able to claim for workers (including those on fixed term contracts, office holders, company directors and agency workers, including those employed by umbrella companies) who meet the following criteria:
- They were furloughed and had a CJRS claim submitted for them that meets all relevant eligibility criteria for that particular scheme;
- They have been continuously employed by the relevant employer from the time of the employer’s most recent claim for that employee until at least 31 January 2021;
- They have been paid an average of at least £520 a month between 1 November 2020 and 31 January 2021 (a total of at least £1,560 across the 3 months). The employee does not have to be paid £520 in each month, but must have received some earnings in each of the three calendar months that have been paid and reported to HMRC via RTI. This means that employers will not be able to claim for employees on their books if they have not worked on assignment and earned the minimum amount in the period from November to January. Detailed guidance on what earnings can constitute the £520 minimum earnings will be produced in September;
- They have up-to-date RTI records for the period to the end of January.
The bonus payment will not be available to employers in respect of employees serving a contractual or statutory notice period which started before 1 February 2021.
How is the bonus claimed?
Payments will start to be made to employers in February 2021. More detailed information on how employers make claims under the scheme is expected in further guidance due to be published in September.
In the meantime, the Government has advised employers to ensure that their employee records are up-to-date, including accurately reporting their employee’s details and wages on the Full Payment Submission (FPS) through the Real Time Information (RTI) reporting system. Employers should also make sure all of their Coronavirus Job Retention Scheme claims have been accurately submitted and any necessary amendments have been notified to HMRC.
This bulletin is for general guidance purposes only and should not be used for any other purpose. Brabners is a Limited Liability Partnership