On 31 July 2020, HMRC released further details of the CJRB. The CJRB is all part of the Chancellor Rishi Sunak’s ‘Plan for Jobs’ which was announced in the summer statement on 08 July 2020. This is an initiative to encourage employers to retain or create jobs once the Coronavirus Job Retention Scheme (CJRS) ends on 31 October 2020.
A Coronavirus Job Retention Bonus will be paid to UK employers for every furloughed employee who is retained and remains continuously employed through to the end of January 2021. This is as long as the employee earns, on average, above the Lower Earnings Limit (£520 per month) between the end of the CJRS and the end of January 2021. Employers that do retain employees will receive £1,000 per retained employee (who had previously been furloughed on or before 10 June 2020). Read more about the Chancellor Rishi Sunak’s ‘Plan for Jobs’ here.
Further details and clarification has now been given for employers and employees on eligibility requirements and how to make a claim.
Employers will be able to make a claim for the bonus if they have successfully made a CJRS grant claim for an employee. Employers need to:
- Ensure they comply with obligations to pay and file RTI submissions accurately and on time for all employees
- Maintain enrolment for PAYE online
- Retain a UK bank account
Employers who have been part of a TUPE transfer or business succession will only be able to claim for employees who, in the previous entity, had been furloughed on or before 10 June 2020. They will not be eligible where the transfer / succession takes place after 31 October 2020.
Claims will only be accepted where a successful CJRS claim had been made previously. The ‘further details’ confirm:
- The employee must be continuously employed up to and including 31 January 2021.
- Average earnings at least the value of the Lower Earnings Limit between the end of October and January 2021. This does not mean that the employee has to actually earn £520 per month but they must have earned something each calendar month, reported via RTI which, on average between November and January 2021 is £520 per month. Important is the word ‘earn’. Therefore, we are looking at NI’able earnings from employment, not just £520 of expenses paid.
- Have ‘up-to-date RTI records’.
- The employee must not be serving a period notice, either contractual period or statutory one.
- The employee must have been furloughed at least once on or before 10 June 2020, with the exception of returners from family-related leave and military reservists returning the workplace. This mirrors eligibility for furloughing.
From February 2021, employers will be able to claim the Job Retention Bonus through GOV.UK. More detail about this process will be published in guidance by the end of September 2020.
Note that the bonus will be taxable as income for Corporation Tax or Self-Assessment. It is not taxable on the employee.
Many employers will be looking at this retention bonus, though many employers have already rejected the idea of claiming it. Here is what HMRC are saying employers should be doing if they plan to claim:
- Ensure employee records are up-to-date when sent via the Full Payment Submission
- Report accurately and on time via RTI
- Ensure CJRS claims are accurately submitted and any amendments made. The word accurate is key here
- Start assessing whether the employer is eligible
- Start assessing which employees will be eligible