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COVID-19 Information Hub

The Coronavirus Job Retention Bonus

In July, the government announced a new Coronavirus Job Retention Bonus (the ‘bonus’) to provide additional support to employers who keep on their furloughed employees in meaningful employment, after the Coronavirus Job Retention Scheme (CJRS) ends on 31 October 2020.

Updated 05/10/20

The bonus is a one-off payment to employers of £1,000 for every employee who they previously claimed for under the CJRS, and who remains continuously employed through to 31 January 2021; subject of course to conditions.

Please read on for our commentary and analysis of the key elements of the scheme. Please note, this information is based on our understanding and interpretation of the latest guidance, published on 2 October. Supplementary guidance may be issued by the government at any time, which may change this advice.

We recommend any employer considering making a claim to seek professional advice or read the GOV.UK issued guidance for full details. Click here

In this article, we will address:

  • Employer eligibility – which employers can claim the bonus
  • Employee eligibility – which employees fall within the scheme
  • Criteria for an eligible claim
  • How to claim
  • Reducing the risk of having a claim withheld or repaid

Employer eligibility – which employers can claim the bonus

All employers are eligible for the scheme including recruitment agencies and umbrella companies.  The bonus of £1,000 per eligible employee, is paid to the employer.

Where employees have transferred to a new employer under TUPE or due to a change in ownership, the new employer may be eligible to claim the bonus.  Professional advice should be sought before making a claim.

Employee eligibility – which employees fall within the scheme

Providing the employees meet the necessary criteria, the bonus is available for all employees, including company directors, officeholders, agency workers and those employed by umbrella companies.

Employees on fixed-term contracts also fall within the scheme, providing they meet the eligibility criteria.

Criteria for an eligible claim

An employee must:

  • Have been previously furloughed and a CJRS claim submitted for them that meets all the relevant eligibility criteria for the CJRS scheme
  • Be continuously employed from the most recent claim for the employee until at least 31 January 2021
  • Receive a payment (of any amount) in each of November, December and January. These payments must total £1,560 across the 3 months, an average of at least £520 for the 3 month period
  • Not be serving a contractual or statutory notice period, that started before 1 February 2021

An employer must:

  • Have paid and filed their PAYE accurately and on time under RTI
  • Maintain their enrolment for PAYE online and have a UK bank account

An employer can still claim for the bonus, even if they are making a claim for the employee under the new Coronavirus Job Support Scheme which commences 1st November.

How to claim

Employers will be able to claim for the bonus from 15 February 2021, in a relatively short window, closing on 31 March 2021.  No further claims will be accepted after this date.

If you use an agent who is authorised to do PAYE online for you, they will be able to claim the bonus on your behalf.

We are expecting further guidance to be issued at the end of January 2021 for both employers and their agents.

 

Reducing the risk of having a claim withheld or repaid

These risks should be taken seriously.  HMRC can withhold a claim for many reasons and even if the bonus is paid, HMRC could require it to be repaid at a later date.

An employer should ensure that CJRS claims made through to 31 October are accurate with the necessary supporting agreements and records in place.  Where a CJRS claim was incorrectly made, a bonus will not be payable or will need to be repaid.  Ensure your CJRS claims have been accurately submitted and if necessary, make any amendments to correct them.

Ensure RTI records are up to date and earnings are accurately paid and reported to HMRC.  Failure to maintain accurate records may jeopardise an employer’s claim and earnings only count towards the average earnings minimum threshold of £520 per month if they have been paid and reported to HMRC via RTI.

Kirk Rice LLP can support you to manage and pay your team effectively at this time.  For more information, please get in touch with your client manager or email info@kirkrice.co.uk.

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