Details of the Job Retention Bonus
The Job Retention Bonus, which was announced as part of last month’s Summer Economic Update, is an initiative designed to encourage employers to bring employees who had been furloughed under the Coronavirus Job Retention Scheme (CJRS) back to work. The government has now revealed further details about the initiative, including who is eligible and how employers can claim. Here’s what you need to know.
All employers who furloughed one employee or more through the Coronavirus Job Retention Scheme are eligible to claim the taxable bonus of £1,000 per eligible employee, including recruitment agencies and umbrella companies. Employers can make a claim in respect of any employee who:
has been furloughed through the Coronavirus Job Retention Scheme for any period of time, up to the closure of the scheme on 31st October 2020
is brought back to continuous employment immediately after the employer stops claiming for them and remains employed until at least 31st January 2021
earns a minimum average salary of £520 per month between November 2020 and January 2021 (a total of at least £1,560 across the three-month period)
is not serving a contractual or statutory notice period that started before 1st February 2021 for the employer making a claim
HMRC will only count earnings that are recorded through RTI towards the £520 a month average minimum earnings threshold. More detailed guidance on what earnings can be included is expected to be published in September 2020. In the meantime, you can read more about the eligibility criteria for the Job Retention Bonus on the government’s website.
Limited company directors can be included in a claim
Limited companies can claim for company directors who return to work from furlough, provided that they are employees of the company and that they meet the eligibility criteria outlined above.
No limit on the number of claims an employer can make
There is no limit to the number of eligible employees that employers can claim for, so a client that has brought back 50 eligible employees, for example, will be entitled to make 50 claims. The Chancellor has said, “if employers bring back all nine million people who have been on furlough, this would be a £9 billion policy to retain people in work.”
Payments will begin in February 2021
Employers will be able to start making Job Retention Bonus claims through the government’s website after they have filed PAYE for January 2021. The government will begin making payments from February 2021.
This article was first published on the FreeAgent website.