CJRS update: Job Retention Bonus

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06 October, 2020

The Job Retention Bonus aims to reduce the scope for compulsory redundancies by rewarding employers who retain their furloughed employees. The bonus is a fixed £1,000 one-off taxable payment, payable to the employer, for each eligible employee that was furloughed and kept continuously employed until 31 January 2021. Since the bonus does not need to be paid to the employee, it can be used to assist with company finances, which will be particularly welcome within the construction industry.

An employer can claim the bonus if they have furloughed employees and made an eligible claim for them through the Coronavirus Job Retention Scheme (CJRS). The bonus can also be claimed for individuals who are not employees, such as office holders or agency workers, for whom which a grant was claimed under the CJRS. An employer can still claim the bonus if they make a claim for the same employee through the Job Support Scheme.

Eligibility criteria

In order to qualify for the bonus, the employer must:

  • Have continuously employed the employee from the end of the claim period of the last CJRS claim for them, until 31 January 2021.
  • Ensure that the employee is not within a contractual or statutory notice period on 31 January 2021.
  • Have paid the employee enough to meet the minimum income threshold.

The minimum income threshold

To claim the bonus, an employer must pay its employee a minimum of £1,560 (gross) across the following three tax months:

  • 6 November - 5 December 2020;
  • 6 December - 5 January 2020; and
  • 6 January - 5 February 2021.

The employer must make at least one payment of taxable earnings (of any amount) in each of the above tax months. The threshold applies regardless of how often employees are paid or any circumstances which reduced the employee's pay, such as statutory or unpaid leave.

The Government has produced helpful examples to demonstrate how employees can meet the minimum income threshold.

TUPE

In TUPE situations, in order to claim the bonus, the employer must have furloughed and successfully claimed for the transferred individuals under the CJRS, as their new employer. This means that an employer cannot claim the bonus for employees that transfer to them after the CJRS closes on 31 October 2020.

Preparing to claim

Employers can claim the bonus between 15 February 2021 and 31 March 2021. They will need to have reported all payments made to the employee between 6 November 2020 and 5 February 2021 to HMRC through Full Payment Submissions via Real Time Information (RTI).

In preparation, an employer should ensure that it:

  • Is enrolled for PAYE online;
  • Complies with its PAYE obligations to file PAYE accurately and on time under RTI reporting for all employees between 6 April 2020 and 5 February 2021;
  • Keep its payroll up to date and report the leaving date for any employees that stop working for it before the end of the pay period that they leave in;
  • Uses the irregular payment pattern indicator in RTI for any employees not being paid regularly; and
  • Complies with all requests from HMRC to provide any employee data for CJRS claims.

The Government has advised that the guidance will be updated by the end of January 2021 with details on how to access the online claim service.

For more information contact Emma Swan in our Construction & Infrastructure department via email or phone on 0333 207 1154. Alternatively send any question through to Forbes Solicitors via our online Contact Form.

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