Job retention scheme bonus – further details provided
The Government has published some more information about the job retention scheme bonus for employers who keep furloughed employees employed until 31 January 2021.
The bonus in outline
The bonus is a one-off taxable payment of £1,000 paid to the employer for every employee they have correctly and successfully claimed for under the job retention scheme. The employee must remain continuously employed until 31 January 2021 and must earn at least £520 a month on average between the 1 November 2020 and 31 January 2021. However, employees must not be serving a contractual or statutory notice period at 31 January 2021, meaning that employers will in reality have to retain employees beyond 31 January 2021.
Employers will be able to claim the bonus after they have filed PAYE for January and payments will be made to employers from February 2021.
Which employers can claim?
All employers who have furloughed employees are eligible for the bonus including recruitment agencies and umbrella companies.
HMRC will withhold payment of the bonus pending investigation if it believes there is a risk that job retention scheme claims may have been claimed fraudulently or inflated.
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
- Maintained enrolment for PAYE online
- A UK bank account
Employers must keep their payroll up to date and accurate and deal with all requests from HMRC to provide missing employee data for historic job retention scheme claims. Failure to maintain accurate records may jeopardise the claim.
Where employees of a business have transferred to a new employer under TUPE, the new employer may be eligible for the bonus. To claim the bonus the transferred employees must have been furloughed and successfully claimed for under the scheme by their new employer.
An employer will not be eligible for the bonus in respect of any employee transferred under TUPE after 31 October 2020.
Which employees can be claimed for?
Claims will only be accepted for employees that were eligible for the job retention scheme. Where a claim for an employee was made incorrectly, the bonus will not be payable.
Employers will be able to claim for employees who:
- Were furloughed and had a job retention scheme claim submitted for them that meets all relevant eligibility criteria
- Have been continuously employed from the time of the employer’s most recent claim for that employee until at least 31 January 2021
- 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
- Are not serving a contractual or statutory notice period, that started before 1 February 2021.
Employers can claim the bonus for all employees who meet the above criteria, including office holders, company directors and agency workers.
What counts towards the £520 earnings?
Only earnings recorded through HMRC RTI records can count towards the £520 a month average minimum earnings threshold.
Detailed guidance about what counts as earnings and about the process for claiming will be published in September this year.
Click here to see the current guidance.
The articles published on this website, current at the date of publication, are for reference purposes only. They do not constitute legal advice and should not be relied upon as such. Specific legal advice about your own circumstances should always be sought separately before taking any action.