The Job Retention Bonus – is your business eligible to claim?

Date: October 15, 2020

The Job Retention Bonus will no longer be paid in February 2021. The Coronavirus Job Retention Scheme has been extended until the end of March 2021, removing this bonus.

In July 2020, the Chancellor announced the Job Retention Bonus scheme as part of Government measures to assist businesses impacted by COVID-19.

Through the scheme, businesses can claim a payment for any staff that they furloughed, if they remain continuously employed to the end of January 2021.

A one-off taxable payment of £1,000 will be provided through the bonus for every previously furloughed employee if they have been continually employed up to 31 January 2021.

Businesses will be able to claim the bonus from 15 February 2021 through to 31 March 2021. The money claimed does not have to be paid to the employee.

Which businesses can claim the Job Retention Bonus?

Businesses can claim the bonus if as an employer, they have furloughed their employees and made an eligible claim for these employees through the Coronavirus Job Retention Scheme (CJRS). The employee must have been eligible to receive this grant for the business to be eligible for the Job Retention Bonus.

Additionally, if you make a claim for the employee and you are also claiming through the Job Support Scheme, you can still claim this bonus. Guidance on the Job Support Scheme is still yet to be published (as of 15 October 2020).

Can you claim the Job Retention Bonus if you have repaid the Coronavirus Job Retention Scheme grant back to HMRC?

Where you have repaid the Coronavirus Job Retention Scheme grant back to HMRC, you will not be able to claim this bonus. This is regardless of the reason why the grant was repaid.

Local Restriction Support Grants

The Local Restrictions Support Grant scheme has been increased, meaning that businesses in England can now receive up to £3,000 per month (increased from the previous maximum of £1,500 per three-week period). Businesses will also be eligible for payment sooner, now after two weeks of closure (previously this was after three weeks).

Devolved administrations in Scotland, Wales and Northern Ireland have been provided with a £1.3 billion increase in their guaranteed funding for 2020-21. These administrations may introduce similar measures if they wish.

These additional grants will sit alongside the original Job Support Scheme and the £1,000 Job Retention Bonus, which will be open to claims from 15 February 2021.

Which employees can a businesses claim the Job Retention Bonus for?

In order to claim for an employee, the following must apply:

A business must have made an eligible claim for the employee through the CJRS
The employee must be kept in continuous employment from the end of the claim period of your last CJRS claim, until 31 January 2021
There must not be a contractual or statutory notice period in place between the employer and the employee on 31 January 2021 (this includes notice of retirement)
The business must have paid the correct amounts in each relevant tax month and enough to meet the Job Retention Bonus minimum income threshold
If a business’s CJRS claims are still being checked by HMRC, the Job Retention Bonus can still be claimed, however there may be a delay in the payment being received, until such checks are completed.
The Job Retention Bonus will not be paid by HMRC if an incorrect CJRS claim was made and your employee was not eligible for the scheme.

Can you claim the Job Retention Bonus if employees have been transferred to your business?

Businesses may be eligible to claim the Job Retention Bonus for employees of a previous business which has been transferred to you under TUPE or due to a change in ownership, if:

TUPE rules applied
PAYE business succession rules applied to the transfer
Employees associated with the transfer of a business from the liquidator of a company in compulsory liquidation (where TUPE would have applied), if the company was not in compulsory liquidation

For any employees transferred to you, these must have been furloughed and the business must had successfully claimed for them under the CJRS, as their new employer. All the relevant eligibility criteria for the Job Retention Bonus must also be met for these employees.

A business will not be able to claim the Job Retention Bonus for employees transferred to you after the CJRS closes on 31 October 2020.

You can also claim the Job Retention Bonus for an individual who is not an employee

A claim can also be made through the Job Retention Bonus for individuals who are not employees. This may include agency workers or office holders. In these circumstances, you must have claimed a grant for them under the CJRS and the eligibility criteria of the Job Retention Bonus must be met.

What is the minimum income threshold to claim the Job Retention Bonus?

An employee must have been paid at least the minimum income threshold, for you to be eligible for the claim.

To meet this requirement, employees must have been paid a gross total of at least £1,560 throughout the following tax months:

06.11.2020 to 05.12.2020
06.12.2020 to 05.01.2021
06.01.2021 to 05.02.2021

An employee must be paid at least one payment of taxable earnings (of any amount) in each of these relevant tax months.

The minimum income threshold criteria applies regardless of the frequency that an employee is paid and regardless of any circumstances that may have reduced an employee’s pay during this period (which could include unpaid leave or statutory leave).

HMRC will check that employees have been paid this through Full Payment Submissions via Real Time Information (RTI).

Payments recorded as taxable pay will only count towards the minimum income threshold.

How to claim the Job Retention Bonus

The Job Retention Bonus cannot be claimed until 15 February 2021. An online claims service will be provided on www.gov.uk nearer this time.

Ahead of being able to claim the bonus, all payments made to your employee between 6 November 2020 and 5 February 2021 will need to be reported to HMRC via Full Payment Submissions via Real Time Information (RTI).

To be ready to make a claim on 15 February 2021, the following steps need to have been taken:

Businesses are required to remain enrolled for PAYE online
Businesses must comply with PAYE obligations to file PAYE accurately and on time under Real Time Information (RTI) reporting. This is for all employees between 06.04.2020 and 05.02.2021
Payroll must be kept up to date and you must make sure that the leaving date for any employees that stop working for you before the end of the pay period that they leave in is reported
For any employees not being paid regularly, the irregular payment pattern indicator in Real Time Information (RTI) must be used
Businesses must comply with all requests from HMRC to provide employee data relating to past CJRS claims

The deadline for claiming the Job Retention Bonus

The last date to make a claim is 31 March 2021. After this date, the scheme will close and no additional claims will be accepted.

Additional Support for businesses in Tier 2 and Tier 3 areas

For those businesses in Tier 2 and Tier 3 alert levels, additional Government grants are available, with additional changes to these announced on 22 October 2020.

For those businesses forced to close, Local Restriction Support Grants are also available. businesses in England can now receive up to £3,000 per month (increased from a previous maximum of £1,500 per three-week period). Businesses are also now eligible for payment after two weeks of closure.

The Local Restriction Support Grants also sit alongside the original Job Support Scheme.

Further information on the changes made on 22 October 2020 can be viewed here.

We will provide a further update when more information is published, including how to apply.

How Alexander & Co can assist

Information on how the Government is helping businesses impacted by COVID-19 can be found on their website here. Additional information on the Job Retention Bonus will be uploaded to the Government website in due course and we will keep you updated as further information is published.

If we are already authorised to undertake your PAYE online on your behalf, we will be able to claim the Job Retention Bonus on your behalf. If this is the case, please let us know if you would like us to provide this service.

For any advice or assistance, contact our dedicated team of accountants. Our accountants are here to provide you with all aspects of tax and business growth advice to help your business thrive in the current climate.

Call us on 0161 832 4841, email info@alexander.co.uk or simply fill out the form below and we’ll be in touch shortly.