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Job Retention Bonus - eligibility requirements

The government has today published a policy paper on the Job Retention Bonus.

It's not as detailed as we expected and doesn't provide that much additional information. Further details will be published in September.

Here's what we learned.

Which employers can claim?

You can apply for a bonus for any eligible employees, provided you've made a valid claim for furlough. The government has made it clear that HMRC will withhold payment of the Job Retention Bonus "where it believes there is a risk that Coronavirus Job Retention Scheme claims may have been fraudulently claimed or inflated, until the enquiry is completed".

All employers are eligible for the scheme including recruitment agencies and umbrella companies and those who have acquired employees following a TUPE transfer as explained below.

A new employer may be eligible to claim the bonus in respect of employees of a previous business which were transferred to the new employer if either TUPE applies, or the PAYE business succession rules apply to the change in ownership. A new employer may also be eligible to claim for employees associated with a transfer of business from the liquidator of a company in compulsory liquidation where TUPE would have applied were it not for the company being in compulsory liquidation. All transferred employees must have been furloughed by their new employer.

Which employees can you claim for?

You can only claim for employees who: 

  • were furloughed and had a Coronavirus Job Retention Scheme claim submitted for them that meets all relevant eligibility criteria for the scheme
  • have been continuously employed 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 system (RTI);
  • have up-to-date RTI records for the period to the end of January
  • are not serving a contractual or statutory notice period, that started before 1 February 2021

How much can you claim?

The Job Retention Bonus is a one-off payment of £1,000 for every eligible employee that is claimed for. The bonus will be taxable, so you must include the whole amount as income when calculating your taxable profits for corporation tax or self-assessment.

How to claim

You'll be able to claim from February 2021.  Further details about this process will be published in September.

How to prepare to claim

If you intend to claim the bonus, make sure your employee records are up to date and have been accurately reported through the Real Time Information reporting system. Make sure that all of your furlough claims have been accurately submitted and any necessary amendments have been notified to HMRC.

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