As part of Rishi Sunak’s mini summer Budget, he confirmed that the furlough scheme would continue to wind down as planned, ending in October. However, with the aim of ensuring that after this time those furloughed employees are retained by their employers, he announced a new ‘coronavirus job retention bonus’. This bonus will be introduced at a cost of up to £9 billion to the Treasury and will be payable in February 2021.
Further details on eligibility for the bonus were promised at the end of July and have now been published. However, the additional information published is fairly limited with a new promise of full guidance in September.
Eligibility
Under the scheme, employers will receive a one-off £1,000 bonus for each eligible employee that has been furloughed. To qualify, the following requirements must be met:
- the previously furloughed employee must be continuously employed by the business until at least 31 January 2021;
- the employee must earn at least £520 per month on average between 1 November 2020 and 31 January 2021. The employee must receive some earnings each month but does not need to earn at least £520 each month (only needs to average this);
- RTI records must be up to date to the end of January 2021;
- the employee must not be serving statutory or contractual notice period which started prior to 1 February 2021.
The guidance confirms that it will be possible to claim for all employees which meet these criteria including directors and agency workers.
In the small print of the original release in March, it also stated that to be eligible the employees must also have been included on a furlough claim submitted by 5 July 2020. Interestingly, the latest guidance does not detail this and so there is some uncertainty about the cut-off point.
Claiming the bonus
The guidance states that employers will be able to claim the bonus after PAYE submissions have been filed for January 2021 and payable from the month following. It is not yet clear what the application process will entail and further detail on this is expected in September.
Other points to note
The guidance confirms that the bonus will be taxable and also states that it will not be payable where a claim for an employee was incorrectly made. It further states that HMRC will withhold the bonus payment where they believe claims have been overstated or are fraudulent.
Further information on the JRB can be found here and full guidance on the scheme is expected to be published in September 2020.
Hazlewoods experts have been advising and supporting businesses with their CJRS submissions for the past four months. With over 500 submissions, they have completed over £7.5 million in furlough grant claims.
If you would like support with any of your employment taxes, please get in touch with Katie Williams at katie.williams@hazlewoods.co.uk or 01242 237661.