Coronavirus (Covid-19): Beyond furlough – Job retention bonus scheme

What do we already know?

We updated you in our July and August Newsletter Coronavirus (COVID-19): Beyond furlough – A plan for jobs that the Government has introduced several measures designed to assist the economy as a result of the COVID-19 pandemic, including the Job Retention Bonus scheme.

What’s new?

We update you on further detail of the Job Retention Bonus scheme.

The Job Retention Bonus scheme is intended to support employers who retain their furloughed employees after the CJRS ends on 31 October 2020. The Government’s policy paper (available here) provides more detail about the proposed operation of the scheme.

The scheme will entitle employers to receive a one-off bonus payment of £1,000 (‘Job Retention Bonus’) for every employee who was furloughed under the CJRS, provided that they meet certain eligibility criteria.

Which employers are eligible to use the scheme?

All employers are eligible for the scheme, including recruitment agencies and umbrella companies.

Which employees are eligible for Job Retention Bonus?

Employers will be able to claim a Job Retention Bonus for all employees who meet the relevant criteria, and this will extend to office holders, company directors and agency workers, including those employed by umbrella companies. The criteria must be met regardless of the frequency of an individual’s pay period, hours worked and rate of pay.

Employers will be able to claim for employees who:

• were furloughed and had a CJRS claim submitted for them that meets all relevant eligibility criteria for the scheme;
• have been continuously employed by the relevant employer from the time of the employer’s most recent claim for that employee until at least 31 January 2021;
• have been paid an average of at least £520 a month between 1 November 2020 and 31 January 2021 (a total of at least £1,560 across the 3 months). 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 Real Time Information (RTI);
• have up-to-date RTI records for the period to the end of January 2021;
• are not serving a contractual or statutory notice period that started before 1 February 2021.

A claim may be made in respect of a fixed-term employee whose contract is extended or renewed provided they meet the other eligibility criteria.

Where employees have TUPE transferred to a new employer, the new employer may be eligible to claim the Job Retention Bonus in respect of those employees provided the transferred employees have been furloughed and claimed for under the CJRS by the new employer following a transfer taking place on or before 31 October 2020 (when the CJRS comes to an end).

What are the exclusions?

HMRC will withhold payment of the Job Retention Bonus where it believes there is a risk that CJRS claims may have been fraudulently claimed or inflated, until any enquiry is completed.

When can claims be made, and what should employers do now?

Employers will be able to claim the Job Retention Bonus after they have filed their PAYE information for January 2021, and payments will be made to employers from February 2021.

Full guidance on the operation of the scheme is due to be published by the end of September 2020, but employers who hope to take advantage of the scheme should consider its eligibility requirements now.

Employers should also ensure that they:

• comply with their obligations to pay and file PAYE accurately and on time, including accurately reporting their employee’s details and wages on the Full Payment Submission (FPS) through the RTI reporting system for all employees and maintaining enrolment for PAYE online; and
• keep their payroll and employee records up to date and accurate and address all requests from HMRC to provide missing employee data in respect of historic CJRS claims.