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Info Update 2020/43                                                        Issue Date: 13/08/2020
 
Job Retention Bonus
 
The Chancellor announced a Job Retention Bonus (“JRB”) to provide additional support to employers who keep on their furloughed employees in meaningful employment, after the Government’s Coronavirus Job Retention Scheme (“CJRS”) ends on 31st October 2020.

In summary: the JRB is a one-off payment to employers of £1,000 for every employee who they previously claimed for under the CJRS, and who remains continuously employed through to 31st January 2021. Eligible employees must earn at least £520 a month on average between the 1st November 2020 and 31st January 2021. Employers will be able to claim the JRB after they have filed PAYE for January and payments will be made to employers from February 2021.

Job Retention Bonus
An employer will be able to claim the JRB in respect of any employees that were eligible for the CJRS and they have claimed a grant through the CJRS.

Employer requirements
Employers should ensure that they have:
  • complied with their obligations to pay and file PAYE accurately and on time under the Real Time Information (RTI) reporting system for all employees
  • maintained enrolment for PAYE online
  • a UK bank account

Employers must keep their payroll up to date and accurate, and address all requests from HMRC to provide missing employee data in respect of historic CJRS claims. Failure to maintain accurate records may jeopardise an employer’s claim.

Eligible Employees
Claims will only be accepted for employees that were eligible for the CJRS. Where a claim for an employee was incorrectly made, a JRB will not be payable.

Employers will be able to claim for employees who:
  • were furloughed and had a CJRS claim submitted for them that meets all relevant eligibility criteria for the scheme
  • have been continuously employed by the relevant employer from the time of the employer’s most recent claim for that employee until at least 31st January 2021
  • have been paid an average of at least £520 a month between 1st November 2020 and 31st 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;
  • have up-to-date RTI records for the period to the end of January
  • are not serving a contractual or statutory notice period, that started before 1st February 2021, for the employer making a claim
 
Employers can claim the JRB for all employees who meet the above criteria, including office holders, company directors and agency workers, including those employed by umbrella companies. The above criteria must be met regardless of the frequency of the employee’s pay periods, their hours worked and rate of pay.

What earnings can be included in the £520 a month average minimum earnings threshold?
Only earnings recorded through HMRC Real Time Information (RTI) records can count towards the £520 a month average minimum earnings threshold.

For an employee to be eligible, employees must have been paid at least £520 a month on average between 1st November 2020 and 31st January 2021.

Detailed guidance will be published in September 2020.

Employees who have returned from statutory parental leave
If an employee was on statutory parental leave, returned after 10th June 2020 and was claimed for under the CJRS then the employer will be able to claim the JRB in respect of that employee provided the other eligibility criteria are met.

Employees who are military reservists returning to work
If an employee was mobilised as a military reservist, returned after 10th June 2020 and was claimed for under the CJRS then the employer will be able to claim the JRB in respect of that employee provided the other eligibility criteria are met.

Employees who are on fixed term contracts
If an employee is on a fixed term contract and was claimed for under the CJRS then their employer can claim the JRB in respect of that employee provided the other eligibility criteria are met.

Contracts can be extended or renewed without affecting eligibility for the bonus, provided that continuous employment is maintained.

When employers will be able to claim the Job Retention Bonus
From February 2021, employers will be able to claim the JRB through GOV.UK. More detail about this process will be published in guidance by the end of September 2020.

How much employers will be able to claim
The JRB will be a one-off payment of £1,000 to the employer for every eligible employee that is claimed for. The bonus will be taxable, so the business must include the whole amount as income when calculating their taxable profits for Corporation Tax or Self-Assessment.

What employers should do now if they intend to claim the Job Retention Bonus
Employers should 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 CJRS Scheme claims have been accurately submitted and any necessary amendments have been notified to HMRC

WARNING
Where a claim for an employee was incorrectly made, a JRB will not be payable.

HMRC will withhold payment of the JRB where it believes there is a risk that CJRS claims may have been fraudulently claimed or inflated, until the enquiry is completed.

The above is based on the information contained on the GOV.UK website.
 
 
The advice and comment in this update is not meant to be an authoritative statement of the law. The articles and summaries should not be applied to any specific set of facts and circumstances without seeking further advice. Whilst every care is taken to ensure that the content is correct Sentient cannot accept responsibility for the accuracy of statements made nor the result of any actions taken by individuals after reading such.
 
 
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Ilkley Road
Otley
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