Back in July during the Summer Update Rishi Sunak announced a Job Retention Bonus. A one off bonus of £1,000 for each furloughed employee who is still employed as of 31st January 2021. This will be paid to the employer – not the employee.
As we said previously, while this is a great bonus and will help many employers and employees; unfortunately the reality is £1,000 per employee will not go far for those businesses still not able to trade to full capacity and those with employees on higher earnings. It will not save all jobs, but it will help to save many, and will be a welcomed bonus.
When will this bonus be available?
Claims for this bonus can be submitted in February after the January payroll (RTI) is submitted. We’re expecting more detailed guidance at some point in September, on how we can actually submit these claims, how long it will take for the cash to be paid into your account, etc.
So what is the nitty gritty on these bonuses I hear you ask – can directors claim for themselves? Which employees are businesses able to claim the bonus for?
I’m sure they’ll be additional conditions when the next lot of guidance is published, but for now this is what they’re saying:
- The employee must earn above £520 per month on average for Nov/Dec/Jan
- The employee was furloughed at any point during the scheme and included on a Job Retention Scheme claim
- The employee has been continuously employed up until at least 31st Jan 2021
- The employee is not serving a contractual or statutory notice period that started before 1st Feb 2021
- All payroll (RTI) returns are up to date and submitted to end of Jan 2021
Therefore reading this it would seem that Directors are able to claim the bonus for themselves. If they’ve been furloughed at any point and have made a valid claim.
However, until the final guidance is published I wouldn’t like to get hopes up and say a definite yes. As by logic a Director wouldn’t be making themselves redundant as there would be no one left to run the business. So it kind of goes against the spirit of the scheme of keeping your employees in work.
Other points to note
It’s worth noting that HMRC will withhold payment of the bonus where it believes there is a risk that CJRS claims may have been fraudulent or inflated, until the enquiry is completed.
And of course, like the other grants, this bonus will be taxable. So employers must include the whole amount as income (use the Other Income code in Xero if doing your own bookkeeping) when calculating the taxable profits for Corporation Tax.
Finally, you can claim this bonus if you are using the new Job Support Scheme announced as part of the Winter Economy Plan.