On 5 November 2020, the government announced an extension to the Coronavirus Job Retention Scheme (CJRS) to 31 March 2021. Because of this, the policy intent of the Job Retention Bonus’ (JRB) falls away.
The JRB will not now be paid in February 2021. Further updates are awaited from the government.
This note summarises guidance up to 4 November 2020, before the JRB was withdrawn.
HMRC issued further guidance on 2 October 2020 in respect of the JRB.
The JRB is a one-off payment of £1,000, made to employers where:
- An employee was previously furloughed.
- An eligible Coronavirus Job Retention Scheme (CJRS) claim was made in respect of that employee.
- The employee remains employed at 31 January 2021.
The £1,000 payment is made to employers for each employee who meets the conditions.
As with other Coronavirus grants, the JRB will be taxable as the employer’s income, unless paid to a non-business recipient such as individuals employing nannies and domestic staff.
- The JRB can be claimed for employees, officeholders, company directors and agency workers, including those employed by umbrella companies where the below conditions are met.
- A claim for the bonus may be made in respect of an employee where a claim is also made under the Job Support Scheme.
Conditions
In order for an employer to qualify for the grant in respect of a specific employee, the following conditions must be met:
- The employee must have been furloughed and had an eligible Coronavirus Employee Job Retention Scheme (CJRS) claim submitted for them.
- The employee must have remained continuously employed between the end of the claim period of the final CJRS claim for them and 31 January 2021.
- The employee must not be serving a contractual or statutory notice period as at 31 January 2021 (including notice of retirement).
- In the three tax months ending 5 February 2021, the employee must have been paid a total of at least £1,560 (gross). This equates to an average of £520 per month, or £120 per week.
- At least one payment of taxable earnings must have been made and reported under Real-Time Information (RTI) in each of the following tax months:
- 6 November to 5 December 2020.
- 6 December 2020 to 5 January 2021.
- 6 January to 5 February 2021.
Where a claim under the CJRS was made in respect of an employee but that grant was repaid to HMRC, for whatever reason, no JRB claim can be made in respect of that employee.
Example
The final two conditions above can result in surprising effects.
An employee who otherwise meets the conditions for the bonus and is paid (gross):
- £1,000 in November 2020
- £100 in December 2020
- £850 in January 2021
Would qualify for the JRB, as they were paid a total £1,950 in the three relevant tax months (ie more than £1,560), with taxable earnings in each month.
An employee who otherwise meets the conditions for the bonus and is paid (gross):
- £1,000 in November 2020
- £0 in December 2020
- £850 in January 2021
Would not qualify for the JRB, as they did not receive taxable earnings in December 2020. This is despite their total earnings of £1,850 being more than the £1,560 minimum.
Timing of claims
- Employers will be able to claim the JRB after they have submitted a Full Payment Submission under RTI to HMRC including all payments made to the relevant employee between 6 November 2020 and 5 February 2021.
- Claims for the JRB cannot be made until 15 February 2021 and must be made by 31 March 2021 at the latest.
Transfer of Undertakings Protection of Employment (TUPE)
A new employer may be eligible to claim the JRB in respect of employees of a previous business which were transferred to the new employer if:
- The TUPE rules applied to the transfer.
- The PAYE business succession rules applied to the change in ownership.
- Or, the employees were associated with the transfer of a company in liquidation where the TUPE rules would have applied but for the liquidation.
An employer will not be eligible for the JRB in respect of any employee transferred after 31 October 2020.
Preparing for JRB claims
In preparing for JRB claims, HMRC suggest that employers should:
- Ensure that their employee records are up-to-date, including reporting accurately and on time each employee's details and wages for the 2020-21 tax year via the RTI reporting system.
- Ensure all of their CJRS claims have been accurately submitted and any necessary amendments have been notified to HMRC.
- Use the irregular payment pattern indicator in Real-Time Information (RTI) for any employees not being paid regularly.
- Comply with all requests from HMRC to provide employee data for past CJRS claims.
HMRC will issue further guidance before 31 January 2021 with details of how to access the online claim service.
Links
Coronavirus Job Retention Scheme (CJRS)
Coronavirus Job Retention Scheme, a cash grant that is designed to allow employers to retain staff who would otherwise be laid off.
Job Support Scheme
The employee ‘Job Support Scheme’ replaces the Coronavirus Job Retention scheme (CJRS). It is designed to protect viable jobs in businesses who are facing lower demand over the winter months due to COVID-19.
External links