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COVID-19: New guidance for employers and a Treasury Direction on the Job Retention Bonus

  • Market Insight 7 October 2020 7 October 2020
  • UK & Europe

  • Coronavirus

As part of the government's plans to support the UK economic recovery, in July it announced plans to pay a Job Retention Bonus to employers who continue to employ furloughed employees after the Coronavirus Job Retention Scheme (CJRS) ends on 31 October 2020. The government has now published guidance and a Treasury Direction which states that the purpose of the Job Retention Bonus is to "enhance and consolidate the purpose of the CJRS".

COVID-19: New guidance for employers and a Treasury Direction on the Job Retention Bonus

The Job Retention Bonus enables eligible UK employers to claim a one-off taxable payment of £1,000 for every eligible furloughed employee who is continuously employed through to 31 January 2021. Here, we look at the key eligibility requirements and considerations for employers claiming under the scheme, as set out in the guidance and Treasury Direction.

Which employers can claim?

To qualify for a Job Retention Bonus, employers must have complied with all the PAYE obligations, kept their payroll up-to-date and maintained accurate records, and have a UK bank account.

Employers can still claim the bonus whether or not they make a claim for that employee under the new Job Support Scheme which opens on 1 November 2020 and will run for 6 months.

Which employees can be claimed for?

Employers can make a claim in respect of employees who:

  • were furloughed and for whom the employer submitted an eligible CJRS claim
  • were continuously employed from the time of the employer's last CJRS claim for that employee, until at least 31 January 2021
  • were paid the "minimum income threshold" - at least £1,560 (gross) in aggregate across the tax months:
    • 6 November to 5 December 2020
    • 6 December 2020 to 5 January 2021
    • 6 January to 5 February 2021

The employer must have made at least one payment of taxable earnings (of any amount) to the employee in each of these tax months. There are some practical examples to help employers with the minimum income threshold requirement.

  • are not serving a contractual or statutory notice period for the employer that started before 1 February 2021

Where an employer has repaid all of the furlough grant received in respect of an employee (for whatever reason), they cannot claim a Job Retention Bonus for them.

Employers can claim for individuals who are not employees, such as office holders or agency workers, as long as the other eligibility criteria are met.

In addition, employees who have transferred to an employer under TUPE before 31 October 2020 may come within the scheme if they were furloughed and the employer made a successful claim for them under the CJRS.

When can claims be made?

Employers can claim the bonus between 15 February 2021 and 31 March 2021, when the scheme will close.

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

What steps should employers take?

The Job Retention Bonus cannot be claimed before 15 February 2021. As such, the priority for many employers at this stage will be to focus on the new Job Support Scheme. This involves assessing which employees they may want to claim for and how they may want to make use of that scheme, if at all.

That said, employers can take steps to prepare for the Job Retention Bonus claims process. Employers should ensure that all employees they wish to make a claim in respect of meet the minimum income threshold, such as zero-hours employees who do not necessarily receive pay in a particular month. In addition, employers should make sure the furlough claims they have made are accurate and, if appropriate, any amendments are notified to HMRC prior to the amnesty deadline of 20 October 2020. All requests from HMRC must be complied with and employee payroll reporting must be up-to-date and accurate.

Please do not hesitate to get in touch in relation to any aspect of this note.

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