New guidance has been released on the Job Retention Bonus which will be worth up to £9 billion. The Job Retention Bonus is a £1,000 taxable payment to the employer, for each eligible worker that was furloughed and that has been kept continuously employed until 31 January 2021. The key points are below.
Who is eligible for the bonus?
The bonus is available to employers for each worker who has been on furlough at some point, remains employed and is not under notice for termination of their contract on 31 January 2021.
Payments employers receive under the scheme must be included as income when calculating taxable profits for Income Tax and Corporation Tax purposes (unless employees are employed but not as part of a business i.e. nannies, they are tax exempt).
Can employers only claim the bonus in respect of employees?
The bonus scheme covers employees, casual workers, zero hours workers and office holders and agency workers as long as they were furloughed, and other earnings eligibility criteria are met.
Employers can still claim if they are receiving support from the Job Support Scheme which launches on 1 November 2020.
How much is the bonus?
A payment will be made to the employer for each eligible worker of £1000 by HMRC. The employer does not have to pass this on to the worker.
What is the eligibility criteria?
The worker must meet the minimum income threshold and the employer must have paid the worker at least £1560 (gross) throughout the tax months 6 November 2020 – 5 December 2020, 6 December 2020 to 5 January 2021 and 6 January to 5 February 2021. The employer must make at least one payment of taxable earnings of any amount in each of the relevant tax months. This information will be checked via Real Time Information (RTI) submissions.
Only payments recorded as taxable pay count towards the minimum income threshold.
The minimum income threshold applies regardless of if pay has been reduced for unpaid or statutory leave such as SSP.
Employers can claim for employees of a previous business who have been transferred if TUPE rules applied.
When can claims be made?
Claims can be made between 15 February 2021 and 31 March 2021. Further guidance on claims will be released by the end of January 2021.
Other Guidance
Some guidance has been produced with examples of where certain workers may and may not meet the minimum income threshold.
Find out more here.
Deadline for final claims under the Coronavirus Job Retention Scheme
The deadline for submitting or changing claims under the Coronavirus Job Retention (furlough) scheme for periods ending on or before 30 October 2020 is 30 November 2020.
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