A summary of the Government guidance and Treasury Direction on the Job Retention Bonus.
The stated purpose of the Job Retention Bonus (JRB) is to enhance and consolidate the purposes of the CRJS that being, to continue the employment of employees whose employment has been adversely affected by Coronavirus or the measures taken to prevent or limit the transmission of the Coronavirus.
What did we know previously?
The JRB is a one-off, taxable payment of £1,000 provided to UK employers for every furloughed employee who remains continuously employed in meaningful employment through to 31 January 2021. Employers would not be eligible to claim the JRB where they have repaid any monies claimed under the Coronavirus Job Retention Scheme (“CRJS”) back to HMRC (regardless of the reason for doing so).
Employees must earn at least £520 a month on average between 1 November 2020 and 31 January 2021 (a total of at least £1,560 across the 3 months).
Further to be eligible to claim the JRB in respect of an employee they must not be serving a contractual or statutory notice period on 31 January 2021 (including where this is linked to retirement).
Claims can be made once the employer has filed PAYE for January 2021. JRB payments are expected to be made from February 2021.
What do we know now?
Following the initial announcement of the JRB scheme on 31 July 2020, the Government published further details and an amended Treasury direction on 02 October 2020, giving employers more detail on how the JRB will operate.
The updated guidance provides information as to which employers are considered eligible to make a JRB claim and employers must satisfy these requirements at the time of submitting their JRB claim, namely that the employer has:
- a PAYE scheme
- made a claim in respect of the employee under the CJRS
- has delivered the required information to HMRC– this is information of all relevant payments made by the employer to the employee between 6 April 2020 – 5 February 2021
Eligible employers can make a claim for the JRB in respect of employees who meet the following criteria:
- the employer has made a claim for the employee under the CJRS
- the employee has been employed (without their employment terminating) for the whole of the period beginning immediately after the period covered by the last CJRS claim submitted by the employer and ending on 31 January 2021
- at least one payment of taxable earnings is made to the employee in each of the 3 JRB periods (“the Relevant Three Month Period”) and each payment must be included in a PAYE return
- the total value of the payments made across the Relevant Three Month Period is at least £1,560 (gross). This applies regardless of how often employees are paid and whether or not during the Relevant Three Month Period the employee has taken statutory or unpaid leave which has affected the level of pay received in the Relevant Three Month Period
The Relevant Three Month Period is broken down into the following periods:
- 6 November 2020 – 5 December 2020
- 6 December 220 – 5 January 2021
- 6 January 2021 – 5 February 2021
If an employee’s employment transfers to a new employer under TUPE, then the new employer can only claim for the JRB if the new employer has claimed for the same employee under the CJRS. As a result, the new employer will not be able to claim a JRB for any employees who transfer after 31 October 2020 when the CJRS closes.
There is no requirement for employers to pay the JRB to the employee.
When can a JRB claim be made?
Claims can be submitted for the JRB from 15 February 2021 – 31 March 2021. Claims made after 31 March 2021 will not be accepted. The Treasury Direction also highlights that for the claim to be successful it must be made in such form and manner and contain such information as HMRC may require at any time (either before or after the payment of the JRB claim).
The guidance also makes clear that an employer can claim under the recently announced Job Support Scheme as well as for the JRB.
Reminder on CJRS claims
Finally, it is worth remembering that 30 November 2020 is the final day on which an employer can submit claims under the CJRS for periods ending on or before 31 October 2020. After 30 November no further claims or amendments to existing claims can be made.