HMRC have released further information about the Government’s Coronavirus Job Retention Scheme bonus, which was announced by Chancellor Rishi Sunak this summer to incentivise businesses to bring their employees back from furlough.
What is the bonus?
Employers will be able to claim a one-off taxable payment of £1,000 for each employee they have previously furloughed and received a grant for under the Coronavirus Job Retention Scheme (CJRS) and who remains in continuous employment through to the end of January 2021.
The bonus can be claimed between 15 February 2021 and 31 March 2021. Bonus payments will be received by the employer, who is not required to pay this to the employee.
To be eligible to claim, the employee must have received earnings of at least the minimum income threshold (a total of at least £1,560 gross) throughout the tax months 6 November 2020 to 5 December 2020, 6 December 2020 to 5 January 2021 and 6 January 2021 to 5 February 2021. Employees must have been paid at least one payment of taxable earnings (of any amount) in each of the above relevant tax months.
Employers will be able to claim this bonus after they have filed PAYE information for January 2021, with the bonus then being paid from February 2021.
Key details of the bonus
Some key details worth keeping in mind are as follows:
– Bonuses can still be claimed for an employee even if you utilise the Job Support Scheme for that same employee
– If you have repaid CJRS grants that were received originally in return for furloughing an employee, regardless as to why, you will not be able to claim the bonus for that employee
– The employee must not be serving a contractual or statutory notice period for the employer on 31 January 2021 (this includes employees serving notice of retirement)
– Employees that have been transferred to your business where TUPE rules applied, furloughed and successfully claimed for under the CJRS scheme (prior to the scheme closing on 31 October), are eligible employees for the Job Retention bonus
– HMRC will check that employees have been paid the minimum income requirement by checking information submitted through a Full Payment Submission (FPS), hence businesses are urged not to submit claims for the bonus unless they are eligible
– The online claim system is expected to be available by the end of January 2021
Although claims for the CJRS bonus cannot be submitted until 15 February 2021, we advise employers to begin preparing their claim now. You must:
– ensure all employee records are up to date;
– accurately report employees’ details and wages on the Full Payment Submission (FPS) through the Real Time Information (RTI) reporting system;
– if you are a director on an annual payroll, consider whether you need to switch to a monthly payroll to meet the above criteria; and
– make sure all of your CJRS claims have been accurately submitted and you have informed HMRC about any changes needed (for example if you’ve received too much or too little).
An important reminder…
As a reminder, HMRC is clawing back any incorrectly claimed grants (both relating to CJRS and other support schemes offered throughout the COVID-19 pandemic), with potential penalties being issued to businesses who don’t notify HMRC of any claims made that they were not entitled to and return the payment.
Please read our recent blog here to familiarise yourself with the rules, the current amnesty period and how you can ensure compliance to avoid a large penalty.
Please note – HMRC have recently confirmed that businesses who have over-claimed can notify HMRC when making their next online claim for financial support. The system will prompt you to do this, so please consider whether this could apply to your business when claiming your next CJRS grant or the CJRS bonus.
Here to help
For advice on the CJRS bonus, other Government support or funding options available, our team are on hand to help. Please get in touch with us on 01254 679131 or via email at firstname.lastname@example.org.
This information is correct as of 22 October 2020. This blog is for general guidance only. Recipients should not act upon any of the information provided without seeking specific professional advice tailored to your circumstances, requirements or needs. Please contact PM+M before making any decisions based on any matters relating to this blog.