Job Retention Bonus - The Treasury Direction

HM Treasury has issued a Treasury Direction under sections 71 and 76 of the Coronavirus Act 2020 to provide details on the Job Retention Bonus (“JRB”). See our previous news item here. Government has also produced guidance to help businesses determine who will be eligible for the bonus.

• The JRB is a £1,000 one-off taxable payment to employers for each eligible employee that an employer furloughed and kept continuously employed until 31 January 2021
• To be eligible, employees must not be serving a contractual or statutory notice (including serving notice of retirement)
• Employers will be able to claim the JRB between 15 February 2021 and 31 March 2021
• Employers do not have to pay the money to employees
• Employees must have been paid a salary of at least £1,560 between 6 November 2020 and 5 February 2021 (preventing employers from accessing a bonus for workers retained on the payroll and engaged on a zero-hour contract and paying them a small amount before 31 January 2021)
• The minimum income threshold (£1,560) must have been paid across the three-month period following the end of the Coronavirus Job Retention Scheme (CJRS) – 6 November 2020 to 5 February 2021 (“the 3-month relevant period”)
• Employers cannot claim the bonus for any employees that have not been paid using the CJRS, or for employees where the CJRS grant claimed has been repaid (regardless of why it was repaid)
• If an employer’s CJRS claim is still being checked by HMRC, the business can claim the JRB but payment may be delayed
• Employers will still be able to claim even if they are receiving support from the Job Support Scheme
• To claim the JRB for employees that have been transferred to a new employer through The Transfer of Undertakings (Protection of Employment) regulations (TUPE) or due to a change in ownership must have been furloughed and successfully claimed for under the CJRS by the new employer and meet all the relevant criteria for the JRB

Government have also published examples of employees who may be entitled to the JRB.

Aspire Comment

The Treasury Direction and Government guidance is welcomed and whilst there is little information available on how the claims will be made, further guidance is expected by the end of January 2021 with details on accessing the online claim service.

The JRB is an example of the steps Government are willing to take to support business in retaining employees through what has been deemed “the worst contraction of the UK economy in over forty years”. However, many are failing to see how the JRB (£1,000 per retained employee) will be a big enough incentive for those businesses that have been severely affected by the pandemic.

The JRB makes slight mockery of the redundancy decisions businesses may have to make as it will not have been easy for many businesses to let go of staff and, in most cases, the cost of retaining employees until 31 January 2021 far outweighs the bonus being offered by the Government. 

Nevertheless, this is a measure that will offer much needed support to smaller businesses who successfully weather the COVID-19 storm and avoid having to make redundancies.

It is essential now that businesses take the time to review the records and calculations for each claim made under the CJRS to ensure that each claim has been accurately made and was valid.  Businesses have until 20 October 2020 to make any corrections, repayments, and adjustments to claims which were not accurate without facing penalties. The deadline is fast approaching, and businesses should be aware that claiming the JRB in February 2021 will be another compliance aspect for HMRC to inspect.

If you require any further guidance, aid with redundancies or help with any other employment tax matters, please get in touch with one of our advisors on 0121 445 6178 or email enquire@aspirepartnership.co.uk