HMRC has published guidance on how businesses can claim the government’s £1,000 job retention bonus. The bonus will be available to employers who keep furloughed workers on the payroll for the next three months.
The bonus is a £1,000 one-off taxable payment to the employer, for each eligible employee that was furloughed and kept continuously employed until 31 January 2021.
Employers will still be able to claim under the scheme, set to cost the Treasury £9bn, even if they are also receiving support from the new job support scheme which will launch on 1 November.
The bonus is available to any employer who has furloughed employees and made an eligible claim for them through the coronavirus job retention scheme (CJRS).
The employee must have been eligible for the CRJS grant for the employer to be eligible for the bonus. It is not payable to any employer who repaid a CJRS grant.
The guidance details the arrangements for employees who have been transferred from another employer. And also for those who are not employees but classified as officeholders or agency workers.
What is a minimum income threshold for Furlough Job Retention Bonus?
However, there is a minimum income threshold the employer must pay the employee. This is a total of at least £1560 (gross) between the period 6 November 2020 to 5 February 2021.
This falls into three tax months of 6 November to 5 December 2020, 6 December 2020 to 5 January 2021 and 6 January to 5 February 2021.
the employer must have paid the employee at least one payment of taxable earnings (of any amount) in each of the three relevant tax months. Taxable earnings would include payment of statutory sick pay.
Before employers can claim the bonus, they will need to have reported all payments made to employees between 6 November 2020 and 5 February 2021 to HMRC through full payment submissions via real time information (RTI).
Businesses must include payments they receive under the scheme as income when calculating their taxable profits for income tax and corporation tax purposes but can deduct employment costs as normal.
Individuals with employees that are not employed as part of a business (such as nannies or other domestic staff) will not have to pay tax on grants received under the scheme.
The scheme will not open for claims until 15 February 202. So, employers will have until 31 March 2021 to make a claim after which the scheme will close. The scheme will not accept any further claims after this date.
Further, HMRC will update the guidance on how to access the online claim service by the end of January 2021.
Rishi Sunak, Chancellor of the Exchequer, said:
‘The job retention bonus is an additional boost employers can receive on top of the extensive support we’ve already put in place for businesses, including loans, grants and our new job support scheme.
‘I know how hard employers have worked to bring furloughed staff back, and this bonus, equal to a 20% wage subsidy, will help ensure they continue to retain them.’
The government has published bonus guidance ahead of the launch of the new job support scheme. Rishi Sunak announced New Job Support Scheme as a part of Winter Economy Plan.
This will run for six months. This will see the government contribute towards wages of employees working for fewer hours due to decreased demand. The scheme will be open to employers across the UK even if they have not previously used the furlough scheme.
Guidance on its operation is due out shortly.
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