5 October 2020
The Coronavirus Job Retention Bonus rewards, incentivises and provides additional support to employers who keep on their furloughed employees after the Coronavirus Job Retention Scheme (CJRS) ends on 31 October 2020.
From 15 February 2021 until 31 March 2021 employers will be able to apply for a one-off taxable payment of £1,000 for every eligible employee for whom they have made an eligible claim under the CJRS – provided the eligibility criteria of the job retention bonus are also met.
This article explains the employer and employee eligibility criteria for the job retention bonus.
Which employees are eligible for the Coronavirus Job Retention Bonus?
As an employer, you can claim the job retention bonus for any employee:
- for whom you made an eligible and valid grant claim under the CJRS, if you have not repaid that grant for any reason;
- that you have kept continuously employed from the end of the claim period of your last CJRS claim for them until 31 January 2021;
- who is not serving a contractual or statutory notice period (including for retirement) for you on 31 January 2021; and
- for whom you paid in each relevant tax month enough to meet the minimum income threshold.
You can also claim the job retention bonus for individuals who are not employees, such as office holders or agency workers, if you claimed a CJRS grant and the other eligibility criteria are met.
Claiming the CJRB and the Job Support scheme
You can claim the CJRB and make a claim for the same employee through the Job Support Scheme.
Claiming the job retention bonus while CJRS checks are ongoing
If HMRC are checking your CJRS claims, you can still claim the job retention bonus but HMRC states that payment may be delayed until those checks are completed.
HMRC will not pay the bonus if you made an incorrect CJRS claim for the employee.
The minimum income threshold for the job retention bonus
To be eligible for the job retention bonus, you must 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
- 6 January to 5 February 2021
You must pay the employee at least one payment of taxable earnings (of any amount) in each of these tax months.
The minimum income threshold criteria apply regardless of:
- how often you pay your employees; or
- any circumstances that may have reduced the employee’s pay in the relevant tax periods, such as being on statutory leave or unpaid leave.
HMRC will check that the employees have been paid at least the minimum income threshold by checking information the employer has submitted through Full Payment Submissions via Real Time Information (RTI).
What payments are included in the minimum income threshold?
Only payments recorded as taxable pay will count towards the minimum income threshold. Taxable pay is reported to HMRC as a single figure through Full Payment Submissions via RTI.
Net pay pension deductions are not included. However, pay is qualifying taxable earnings in a relevant tax period even though its amount does not necessarily meet the threshold to pay income tax.
Employer requirements to be able to claim the job retention bonus
As the employer, to be eligible to claim you must:
- have maintained enrolment for PAYE online and a UK bank account;
- comply fully with your PAYE obligations between 6 April 2020 and 5 February 2021;
- keep your payroll up to date and report the leaving date for any employees that stop working for you before the end of the pay period that they leave in;
- use the irregular payment pattern indicator in RTI for any employees not being paid regularly, and
- comply with all requests from HMRC to provide employee data for your past CJRS claims.
Tax treatment of the job retention bonus
You must include payments you receive under the job retention bonus as income in calculating taxable profits for income tax and corporation tax purposes.
You can deduct employment costs as normal when calculating taxable profits for income tax and corporation tax purposes.
If you’re an individual with employees who are not employed as part of a business (such as nannies or other domestic staff), you will not have to pay tax on grants received under the scheme.
Employees transferred under TUPE
You may be able to claim the job retention bonus for employees transferred into your business under TUPE regulations or because of a change in ownership 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 were not in compulsory liquidation;
- the employees meet all the relevant eligibility criteria; and
- you have furloughed and successfully claimed for them under the CJRS as their new employer.
You will not be able to claim the job retention bonus for any employees who are transferred into your business after the CJRS closes on 31 October 2020.
For more information on the Job Retention Bonus, please contact