CORONAVIRUS - 27.08.2020

Job Retention Bonus: £1,000 per eligible employee

To encourage the retention of previously furloughed employees, the government has announced a Job Retention Bonus of £1,000 per eligible employee. What conditions must be met to qualify?

Qualifying date

The Chancellor has announced several new financial measures that are designed to support employers following the coronavirus pandemic.

Job Retention Bonus. Under this new scheme, employers will be able to apply for a one-off bonus payment of £1,000 for each previously furloughed employee who is still in their employment on 31 January 2021 providing several other conditions are met.

Other conditions

Those conditions are that:

  • the employee was properly furloughed in accordance with the Coronavirus Job Retention Scheme (CJRS) rules
  • a CJRS claim was correctly submitted for that employee
  • the employee has been continuously employed by you until at least 31 January 2021 , i.e. there have been no breaks in their employment
  • the employee has been paid an average of at least £520 per month between 1 November 2020 and 31 January 2021 , i.e. at least £1,560 across those three months
  • you have accurate and up-to-date RTI records for the period to 31 January 2021 .

Average earnings

The employee needn’t have been paid a total of £520 (or more) in each month between 1 November 2020 and 31 January 2021 but they must have received some earnings in each of those three months. If not, you can’t claim a £1,000 bonus payment.

Serving notice

Should a previously furloughed employee be in your employment on 31 January 2021 but at that point is serving out their contractual or a statutory notice period - perhaps because they have resigned or you’ve served them with notice of redundancy - you can’t claim the £1,000 bonus.

That said, if you are in a redundancy consultation process, but haven’t yet served a formal notice of redundancy, the bonus may be claimed if the other conditions are met.

Note. The £1,000 bonus may be claimed for employees and company directors.

How to claim

Like other CJRS payments, you will be able to apply for each £1,000 bonus payment online. This process will commence in February 2021.

Full details on how to submit a claim will be published at the end of September 2020 (see The next step ). Bonus payments will only be sent to a UK bank account.

Tip. There’s no limit on how many £1,000 job retention bonus claims you can submit. However, this isn’t a tax-free payment.

Tip. All bonus payments received must be declared as income when calculating your taxable profits for corporation tax or self-assessment purposes.

The previously furloughed employee must be in your employment on 31 January 2021 and not working out any notice period at that point. They must have been properly furloughed, continuously employed and paid, on average, at least £520 per month between 1 November 2020 and 31 January 2021. The bonus payment is taxable.

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