Coronavirus Job Retention Bonus
HMRC has now published guidance on how businesses can claim this one-off taxable bonus of £1,000 for each eligible employee.
The bonus is intended to reward and incentivise employers who continue to employ their furloughed employees to the end of January 2021. Unlike the CJRS, there is no need for the government funding to be paid to the employees.
A business can claim the CJRB for employees, directors and agency workers, but only if they have been furloughed and are eligible for the CJRS grant. It therefore follows that a claim cannot be made for employees who have not been paid using the CRJS because (regardless of the reason) the grant amounts have been repaid.
Given the substantial cost to the Exchequer, HMRC will be reviewing the validity of CJRS claims, and have already commenced their initial approach of voluntary compliance to allow employers to repay any erroneous CJRS claims.
If HMRC opens a formal compliance check, the employer can still claim the CRJB but it is likely the payment will be delayed until those checks are completed. Clearly, the bonus will not be paid if it transpires an incorrect CJRS claim was made and the employee was not eligible.
As well as employees being eligible for CJRS, the other criteria is as follows:
- The employees must have been continuously employed from the end of the claim period of the last CJRS claim until 31 January 2021
- They must not be serving a contractual or statutory notice period (including a notice of retirement) on 31 January 2021
- The CJRB minimum income threshold is met (please see below)
The minimum income threshold
An employee will be eligible if they receive at least a total of £1,560 taxable gross pay throughout the tax months 6 November to 5 December 2020, 6 December 2020 to 5 January 2021 and 6 January 2021 to 5 February 2021 through RTI submission. They must receive at least one payment of taxable pay in each of the three months, although there is no minimum monthly requirement provided that the total pay for the entire period amounts to at least £1,560.
It does not matter how often employees are paid, or any circumstances that have reduced the employee’s pay (e.g. unpaid leave); the minimum income threshold conditions still need to be met.
Change in business ownership
For businesses that have seen a change in ownership, it may be possible to claim the CJRB for employees of the acquired business if those employees transferred under TUPE and the PAYE business succession rules applied. Where a business has been transferred from a liquidator under a compulsory liquidation, the successor may claim the bonus if TUPE would have applied were it not for the liquidation.
The same eligibility criteria applies to employees who are transferred to a new business, which means they must have been furloughed with a valid claim for CJRS having been made before the scheme closes on 31 October 2020.
A claim can still be made by employers who also make a claim under the Job Support Scheme: a six-month scheme running from 1 November 2020 to help protect viable jobs through the winter months, which has recently been extended for employees of businesses that are legally required to close.
Making a claim
The bonus can be claimed between 15 February 2021 and 31 March 2021, provided that all RTI submissions for the period from 6 November 2020 to 5 February 2021 are up to date. Employers are being advised to ensure they are still enrolled for PAYE online, the payroll is updated with any leavers and the irregular payment pattern indicator in RTI is used for employees who do not receive regular pay.
There is a strict deadline for claiming the CJRB and no claims will be accepted after 31 March 2021.
HMRC’s guidance is expected to be updated by the end of January 2021 with details of how to access the online claim service on GOV.UK. Employers will need to familiarise themselves with the online claim as soon as possible given there is a strict deadline of 31 March 2021 and no claims will be accepted after that date.
For further details please contact your usual UHY adviser or Helen Cowley who will be pleased to assist.