A Treasury Direction and further guidance were issued on Friday, 2 October 2020 setting out more details of the Job Retention Bonus.
The Treasury Direction states that no claim may be made in respect of an employee if it is “abusive or is otherwise contrary to the exceptional purposes” of the CJRS or the Job Retention Bonus. It also states that the purpose of the Job Retention Bonus is to “enhance and consolidate the purpose of the CJRS” - it reiterates that integral to the purpose of the CJRS is that the amounts paid to an employer under the CJRS are “used by the employer to continue the employment of employees whose employment activities have been adversely affected by the coronavirus and coronavirus disease or the measures taken to prevent or limit its further transmission”.
Job retention bonus eligibility
Employers will be eligible to claim a one-off taxable Job Retention Bonus of £1,000 in respect of each employee who was furloughed for the purposes of the Coronavirus Job Retention Scheme (“CJRS”) and who is kept continuously employed until 31 January 2021.
The exclusion if the individual “is on notice of termination of the employee’s employment with the employee’s employer on 31 January 2021” appears to also prevent any claim in respect of an employee who has resigned as well as one who has been served with notice by his or her employer.
There is also a minimum income threshold. Firstly the employer must have paid to the employee a total by way of taxable pay of at least £1,560 (gross) during the tax months 6 November to 5 December 2020, 6 December 2020 to 5 January 2021, and 6 January to 5 February 2021. If the total gross taxable pay paid to an employee during this period falls below that £1,560 figure, the employer cannot claim the Job Retention Bonus in respect of that employee.
Secondly, the employer must also have made at least one payment of taxable earnings (of any amount) to the employee in each of these tax months. If an employee receives no taxable pay during one of the relevant months, the employer cannot claim the Job Retention Bonus in respect of that individual.
This minimum income threshold applies regardless of whether pay is currently reduced - for example, as a result of being on statutory or unpaid leave. The latest guidance includes a number of examples.
Employers will not be able to claim the Job Retention Bonus in respect of employees who transferred to their employment under TUPE after the closure of the CJRS on 31 October 2020. An employer can claim the Job Retention Bonus in respect of those employees who transferred to its employment before that date under TUPE and in certain other circumstances provided that the new employer furloughed them and made a successful claim under the CJRS and that they satisfy the other eligibility requirements for payment of the Job Retention Bonus.
Making a claim
Employers will not be able to make claims for the Job Retention Bonus before 15 February 2021 and then will be able to make claims until 31 March 2021. Guidance for making online claims will be available by the end of January 2021 on GOV.UK.
Before making a claim the employer will too need to have reported all payments made to the relevant employee between 6 November 2020 and 5 February 2021 to HMRC through Full Payment Submissions via Real Time Information (RTI).
The Job Retention Bonus constitutes income for the purposes of calculating taxable profits for Income Tax and Corporation Tax purposes.