When Rishi Sunak announced the introduction of a new Job Retention Bonus ("JRB") on 8 July it was confirmed that all employers were eligible for the scheme.  However, whilst that is correct, not all furloughed employees can be claimed for.

The basics

The JRB is a one off payment of £1,000 to be made to employers (not employees) in February 2021 for certain employees who they previously claimed for under the Coronavirus Job Retention Scheme.  Employees in respect of whom a claim is made must be continuously employed by the employer from the last Coronavirus Job Retention Scheme claim the employer makes through until 31 January 2021. 

The detail

The employees that can be claimed for includes office holders, company directors and agency workers, including those employed by umbrella companies.  Employees who returned from statutory maternity, shared parental, adoption, paternity or parental bereavement leave after 10 June and who were subsequently claimed for under the CJRS can be claimed for subject to all other eligibility requirements being met, and the same applies to military reservists returning to work after 10 June.  Those on fixed term contracts meeting all other eligibility requirements can also be claimed for, and extending or renewing a contract will not affect eligibility as long as continuous employment is maintained.

However, there are a number of circumstances where a claim cannot be made.  These are:-

• Where the employee was not continuously employed from the last CJRS claim until 31 January 2021;
• Where the CJRS claim for the employee was incorrectly made;
• Where the employee does not earn at least £520 per month on average between 1 November 2020 and 31 January 2021;
• Where the employee has been given statutory or contractual notice of termination of employment prior to 31 January, even if they are still employed on that date;
• Where the employer does not have up-to-date RTI records for the employee up to 31 January 2021; and
• Where the employee transferred to the employer under TUPE or under business succession rules after 31 October 2020.

It is not clear whether employees who are at risk of redundancy but who have not been given notice of termination of employment on or before 31 January could be claimed for - the current guidance does not address this scenario.  Cautious employers may want to carry out a cost/benefit analysis of delaying consultation until 1 February if they are concerned about losing the JRB.

There are also a number of requirements incumbent on the employer.  They must have maintained enrolment for PAYE online, have a UK bank account and have complied with their obligations to pay and file PAYE accurately and on time under the Real Time Information reporting system for all employees.  Payroll must be up to date and accurate, and employers will have to address all requests from HMRC for any missing employee data in respect of historic CJRS claims.  Payment will be withheld where HMRC believes there is a risk that fraudulent CJRS claims may have been made until an enquiry is completed.

The practicalities of making a claim

Employers will be able to claim JRB in respect of eligible employees after they have filed PAYE for January.  Claims will be made via the GOV.UK website, and payments will be made from February 2021.

The bonus paid to the employer will be taxable and must be included as income when calculating taxable profits for corporation tax or self-assessment purposes.  This means the employer may not ultimately receive the benefit of the full £1,000.

There are still more details of the JRB to be published.  Guidance on the process for making a claim and what earnings can be included when calculating the £520 per month average earnings threshold is to be published in September.  In the meantime, employers should ensure their records are up-to-date, that employee details and wages have been accurately recorded on the Full Payment Submission through the RTI reporting system and that all of their CJRS claims were accurately submitted.