Coronavirus Job Retention Scheme Bonus
Sep 10, 2020
In his summer statement in July, Chancellor Rishi Sunak announced that employers who keep their staff on for three months after the furlough scheme ends in October will receive a £1,000 government bonus per employee. If employers are encouraged to retain their furloughed employees until at least the end of January 2021, it is hoped this will help to protect jobs.
Some further details of the ‘Job Retention Scheme Bonus’ (JRB) made available by HMRC outline details of eligibility requirements and how you can claim the bonus. The JRB can be claimed for employees and company directors.
How can I claim the Job Retention Scheme Bonus?
- Your employee or director must have been furloughed and had a claim submitted for them that meets all relevant eligibility criteria for the scheme.
- you must keep them continuously employed on the payroll from 1 November 2020 to 31 January 2021.
- you must pay them at least £520 per month on average for those 3 months (a total of at least £1,560 across the three months), as reported under Real-Time Information (RTI).
- you mustn’t try to make them redundant until after 1 February 2021. Your employee must not be serving a contractual or statutory notice period that started before 1 February 2021 if you wish to make a claim.
- you must keep up to date payroll records and PAYE payments.
From February 2021, after you have filed your PAYE for January, you will be able to claim the £1,000 Job Retention Bonus for each employee or director through GOV.UK. The bonus will be taxable, so your business must include the whole amount as income when calculating taxable profits for Corporation Tax or Self-Assessment. More detail about this process will be published in guidance from HMRC by the end of September 2020.
Remember that from 1 September the CJRS grant claim changed once again, and employers are now being asked to contribute more towards the cost of employees’ wages to ensure they continue to receive at least 80% of their wages for the time they are on furlough.
- From 1 September CJRS will pay 70% of usual wages up to a cap of £2,187.50 per month for the hours furloughed employees do not work.
- You will still need to pay your furloughed employees at least 80% of their usual wages for the hours they do not work, up to a cap of £2,500 per month. You will need to fund the difference between this and the CJRS grant yourself.
- The caps are proportional to the hours not worked. For example, if your employee is furloughed for half their usual hours in September, you are entitled to claim 70% of their usual wages for the hours they do not work up to £1,093.75 (50% of the £2,187.50 cap).
- You will continue to have to pay furloughed employees’ National Insurance (NI) and pension contributions from your own funds.
From October 1, the government grant will be reduced again to 60%, before the scheme ends on 31 October.
HMRC has updated its step by step guide for employers, which explains the information that employers need to provide to claim for their employees’ wages. Please let us know if you would like any help in submitting your claim and we’ll be happy to assist.