Claiming the Job Retention Bonus

09 Sep 2020

Chancellor Rishi Sunak's Summer Economic Statement saw the announcement of a Job Retention Bonus (JRB) aimed at encouraging employers to keep employees on the payroll until the end of January.

The JRB is designed to follow the end of the Coronavirus Job Retention Scheme (CJRS), which is being wound down and will finish at the end of October. The Chancellor said furloughing had been the right step to take to protect jobs during the first phase of the coronavirus (COVID-19) pandemic. However, although millions of jobs have been protected so far, Mr Sunak confirmed that furloughing would come to an end this autumn.

What is the JRB?

The JRB 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.

Eligible employees must earn at least £520 a month on average between 1 November 2020 and 31 January 2021. Employers will be able to claim the JRB after they have filed PAYE for January and payments will be made to employers from February 2021.

Which employers can claim the JRB?

An employer will be able to claim the JRB for any employees that were eligible for the CJRS and they have claimed a grant for. Where a claim for an employee was incorrectly made, a JRB will not be payable.

Employers must keep their payroll up to date and accurate and address all requests from HMRC to provide missing employee data in respect of historic CJRS claims. Failure to maintain accurate records may jeopardise an employer's claim. HMRC will withhold payment of the JRB where it believes there is a risk that CJRS claims may have been fraudulently claimed or inflated, until the enquiry is completed.

Which employees can an eligible employer claim the JRB for?

Claims will only be accepted for employees that were eligible for the scheme. Where a claim for an employee was incorrectly made, a JRB will not be payable.

Employers will be able to claim for employees who:

  • were furloughed and had a CJRS claim submitted for them that meets all relevant eligibility criteria for the scheme
  • have been continuously employed by the relevant employer 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. 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 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 for the employer making a claim.

What earnings can be included in the £520 a month average minimum earnings threshold?

Only earnings recorded through RTI records can count towards the £520 a month average minimum earnings threshold.

If an employee was on statutory parental leave, returned after 10 June 2020 and was claimed for under the scheme then the employer will be able to claim the JRB in respect of that employee, provided the other eligibility criteria are met.

If an employee is on a fixed-term contract and was claimed for under the scheme, their employer can claim the JRB in respect of that employee, provided the other eligibility criteria are met. Contracts can be extended or renewed without affecting eligibility for the bonus, provided that continuous employment is maintained.

How can employers claim the JRB?

From February 2021, employers will be able to claim the JRB through GOV.UK. The bonus will be taxable, so the business must include the whole amount as income when calculating their taxable profits for corporation tax or self assessment.

Employers should ensure that their employee records are up to date, including accurately reporting their employee's details and wages on the Full Payment Submission through RTI. Employers should also make sure all their CJRS claims have been accurately submitted and any necessary amendments have been notified to HMRC.

Further information on the JRB can be found here.

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