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    Job Retention Bonus provides £1000 to employers for each employee retained

    Summary

    With the CJRS coming to an end on 31 October 2020, the Government announced a bonus to encourage employers to retain employees to 31 January 2021.

    Employment Associate, Fiona Mendel outlines the Government’s new Job Retention Bonus aimed to support employers to keep on their furloughed employees after the Coronavirus Job Retention Scheme ends on 31 October 2020.

    In order to support the UK’s economic recovery, the Government is introducing a new Job Retention Bonus to assist employers who keep on their furloughed employees in meaningful employment, after the Coronavirus Job Retention Scheme (CJRS) ends on 31 October 2020. Details of the Job Retention Bonus are as follows:

    • A one-off payment will be made to employers of £1,000 for every employee who was previously claimed for under the CJRS, and who remains continuously employed from the date of the last CJRS claim through to 31 January 2021. The bonus will be taxable, so the business must include the whole amount as income when calculating their taxable profits for Corporation Tax or Self-Assessment.
    • Eligible employees must earn at least £520 a month on average between the 1 November 2020 and 31 January 2021. The employee does not have to be paid £520 in each month but must have received some earnings in each of the three calendar months that have been paid and reported to HMRC via RTI.
    • Job Retention bonus claims can be made from February 2021.
    • Where a claim for an employee was incorrectly made, a Job Retention Bonus will not be payable.
    • The Job Retention Bonus will not be made in respect of any employee serving a contractual or statutory notice period that started before 1 February 2021.
    • The Job Retention Bonus can be claimed for all employees who meet the above criteria, including office holders, company directors and agency workers, including those employed by umbrella companies.
    • In order to claim, the above criteria must be met regardless of the frequency of the employee’s pay periods, their hours worked and rate of pay.
    • A new employer may be eligible to claim in respect of transferred employees of a previous business if either TUPE applies, or the PAYE business succession rules apply to the change in ownership or in respect of employees associated with a transfer of a business from the liquidator of a company in compulsory liquidation. An employer will not be eligible for the Job Retention Bonus in respect of any employee transferred under TUPE or under the business succession rules after 31 October 2020.
    • If an employee was on statutory parental leave, returned after 10 June 2020 and was claimed for under the scheme then the employer will be able to claim the Job Retention Bonus in respect of that employee provided the other eligibility criteria are met.
    • If an employee is on a fixed term contract and was claimed for under the CJRS then their employer can claim the Job Retention Bonus in respect of that employee provided the other eligibility criteria are met. Contracts can be extended or renewed without affecting eligibility for the bonus, provided that continuous employment is maintained.
    • Employers will be able to claim the Job Retention Bonus after they have filed PAYE for January and payments will be made to employers from February 2021 via the Government website.
    • More detail about this process will be published by the Government by the end of September 2020.

    Should you have any queries on the above or require any employment related advice, please contact Fiona Mendel at fiona.mendel@seddons.co.uk or on 020 7725 8033 or Head of Employment, Helen Crossland at helen.crossland@seddons.co.uk or on 020 7725 8034.

     

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