Gov job retention bonus

THIIS covers the latest guidance from the Treasury on how businesses in the mobility and access sector can claim the government’s £1,000 Job Retention Bonus for each furloughed employee kept on in the new year.

Designed to continue to support jobs through the UK’s economic recovery from coronavirus, the £9 billion package aims to encourage employers to retain as many employees who’ve been on furlough as possible via a cash reward.

Chancellor of the Exchequer Rishi Sunak said: “The Job Retention Bonus is an additional boost employers can receive on top of the extensive support we’ve already put in place for businesses, including loans, grants and our new Job Support Scheme.”

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The Job Retention Bonus is a £1,000 one-off taxable payment to an employer for each eligible employee that was brought back from furlough and kept continuously employed until 31 January 2021.

Companies will be able to claim the bonus from 15 February until 31 March 2021.

The government has now set out new guidance providing employers with the information they need to know to claim their bonus.

Which companies are eligible?

Companies can claim the bonus if they are an employer who has furloughed employees and made an eligible claim for them through the Coronavirus Job Retention Scheme.

The employee must have been eligible for the Coronavirus Job Retention Scheme grant for the business in order to be eligible for the bonus.

Importantly, employers can still claim the bonus even if they make a claim for that employee through the new Job Support Scheme launching in November.

If an employer has repaid all of the Coronavirus Job Retention Scheme grant amounts to HMRC, then they cannot claim the bonus for any employees that have not been paid using the furlough scheme – this applies regardless of the reason why the company repaid the grant amounts.

Which employees can companies claim for?

The bonus applies to each employee placed on furlough that has remained in continuous employment with the company between the date they came off furlough until 31 January 2021.

Notably, the employee cannot be serving a contractual or statutory notice period for an employer on 31 January 2021, including people serving a notice of retirement.

Also, to be eligible, the employee had to be paid enough in each relevant tax month to meet the Job Retention Bonus minimum income threshold.

Does this apply to those transferred to a company under TUPE or change of ownership?

According to government guidance, companies may be eligible to claim for employees of a previous business that have been transferred if:

  • TUPE rules applied
  • The PAYE business succession rules applied
  • The employees were 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 companies to claim for the bonus for employees that joined the organisation via a transfer, the employer must have furloughed and successfully claimed for these transferred employees under the Coronavirus Job Retention Scheme.

The employees must also meet all the above eligibility criteria for the Job Retention Bonus. This also means companies will not be eligible to claim a bonus for any staff transferred after the furlough scheme closes on 31 October 2020.

This means that you will not be able to claim the Job Retention Bonus for any employees who are transferred to you after the Coronavirus Job Retention Scheme closes on 31 October 2020.

Can a company claim for an individual who is not an employee?

Interestingly, the government guidance notes that companies can claim the bonus for individuals who are not employees, such as office holders or agency workers. To receive the bonus, the company has to have claimed for that individual under the furlough scheme and the individual has to meet the aforementioned Job Retention Bonus eligibility criteria.

What is the minimum income threshold?

As mentioned, a key criterion of employee eligibility for the bonus is ensuring those furloughed workers were paid at least the minimum income threshold.

To meet this, employers have to pay the employee a total of at least £1,560 (gross) throughout the tax months: 6 November to 5 December 2020, 6 December 2020 to 5 January 2021, and 6 January to 5 February 2021.

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

The government states it will check employees have been paid at least the minimum income threshold by checking information a company has submitted through Full Payment Submissions via Real Time Information (RTI).

Don’t miss out and prepare to claim

Companies will not be able to claim until 15 February 2021 and the window to make a claim is relatively tight, with the scheme closing at the end of March.

To avoid missing out, mobility companies can take steps to ensure they are prepared to claim.

Crucially, companies 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 RTI before a claim can be made.

The government has also detailed some more steps companies will need to take now:

  • Still be enrolled for PAYE online
  • Comply with PAYE obligations to file PAYE accurately and on time under Real Time Information (RTI) reporting for all employees between 6 April 2020 and 5 February 2021
  • Keep payroll up to date and make sure to report the leaving date for any employees that stop working for a company before the end of the pay period that they leave in
  • Use the irregular payment pattern indicator in Real Time Information (RTI) for any employees not being paid regularly
  • Comply with all requests from HMRC to provide any employee data for past Coronavirus Job Retention Scheme claims

Further guidance on the claim application process will be published in due course.

If companies need more advice or information, business leaders can contact HMRC via the department’s webchat function or call 0800 024 1222

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