Government Announces Job Retention Bonus Update
The Government has announced more details about the Job Retention Bonus which aims to protect jobs.
Dated: 31 July 2020 Author: James Hunt, Employment Services Senior Manager
In initial plans which were announced by Chancellor Rishi Sunak in early July, businesses will receive a one-off payment of £1,000 for every previously furloughed employee if they are still employed at the end of January next year.
The bonus is designed to continue to support jobs through the UK’s economic recovery from coronavirus by encouraging and helping employers to retain as many employees who’ve been on furlough as possible.
Employers can claim the bonus for all eligible employees who have been furloughed and comes as employers set to start contributing to the furlough scheme as staff return to work and the economy reopens.
- Employers will receive a one-off payment of £1,000 for every employee who has previously been furloughed under Coronavirus Job Retention Scheme (CJRS) – if they remain continuously employed to the end of January 2021
- Employees must earn at least £520 (the National Insurance lower earnings limit) a month on average between the beginning of November and the end of January
- Those who were furloughed and had a claim submitted for them after the 10 June (when the CJRS closed to new entrants), because they were returning from paternal leave or time serving as a military reservist will also be eligible for the bonus as long as they meet the other eligibility criteria
- Employers will also be eligible for employee transfers protected under TUPE legislation, provided they have been continuously employed and meet the other eligibility criteria and the new employer has also submitted a CJRS claim for that employee
- Full guidance on the Job Retention Bonus is expected by the end of September 2020
- Employers will be able to claim after they have filed PAYE for January. Payments will be made from February 2021. Initial details suggest claims will need to be made online (awaiting details)
- Payments will count as income when calculating taxable profits
- No claims possible for employees serving contractual or statutory notice that started before 1 February 2020
Employers need to ensure they have:
- Complied with all RTI filing obligations and deadlines
- Maintained enrolment for PAYE online
- Have a UK bank account
- 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
As the scheme is designed to protect jobs, those who are serving notice for redundancy will not be eligible for the bonus.
From 1 August, the government will continue to pay 80% of furloughed employees wages, but employers will have to pay employers National Insurance Contributions and pension contributions for the hours the employee is on furlough.
For more information about the Job Retention Bonus click here
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