Alongside the recently-announced expansion to the Winter Economy Plan, businesses are reminded that they can claim a bonus from the government if they have brought staff back to work after the end of the Coronavirus Job Retention Scheme (CJRS), and if they have kept them in continuous employment until 31 January 2021.
The Job Retention Bonus is a one-off taxable payment of £1000 which can be claimed by employers for each eligible employee (which includes office holders such as directors) who was furloughed under the CJRS but has been retained for November, December and January and paid on or above the minimum income threshold (£1560 gross).
The bonus of £1000 per employee will need to be claimed through a government portal between 15 February and 31 March 2021 and will be paid out after this. It is a wage subsidy payable to the employer and, unlike the current CJRS grants, does not need to be paid to the employee. The bonus is taxable for Income Tax and Corporation Tax, except for businesses with employees not employed as part of the business, such as agency or domestic staff – although they will still have to meet the eligibility criteria.
Employers must have met their PAYE filing obligations for the 2020/21 tax year and can then make a claim for each employee who meets these criteria:
- You (their employer) made an eligible claim for that employee under the Coronavirus Job Retention Scheme (CJRS)
- You kept them continuously employed from the end of the claim period of your last Coronavirus Job Retention Scheme claim for them, until 31 January 2021
- Your employee isn’t serving a contractual or statutory notice period for you on 31 January 2021 (this includes people serving notice of retirement)
- You paid them enough in each of the relevant tax months to meet the Job Retention Bonus – this will be an average of £520 per month
The scheme has been designed to help employers retain members of staff – especially low paid staff – who have been on furlough. However, one point to bear in mind is that periods of statutory leave or pension deductions may reduce an employee’s taxable pay below the minimum income threshold, which would make them ineligible. The government have published a number of worked examples which may be helpful.
The bonus can be claimed if you have employees that have already been brought back from furlough. As long as they have been continuously employed from the end of the last CRJS claim up until 31 January 2021, and they meet the minimum income threshold requirement, then an employer can claim the £1000 bonus.
For employers considering making redundancies, the benefits of the Job Retention Bonus will also need to be weighed against the costs of wages for three months for those employees. Unless the employee is on low wages, in most cases their wage costs from November to January will be greater than redundancy costs, even taking the Job Retention Bonus into account.
More information on the Job Retention Bonus is here https://www.gov.uk/guidance/check-if-you-can-claim-the-job-retention-bonus-from-15-february-2021