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Job Retention Bonus Scheme

Job Retention Bonus Scheme for employers


Background

In July, the Chancellor, Rishi Sunak, announced a job retention bonus as part of the Government’s Plan for Jobs 2020. Under this initiative, employers, who bring workers back from furlough and continue to employ them between November 2020 and January 2021 will qualify for a £1,000 ‘Job Retention Bonus’. On 2 October, further details of how the bonus scheme will work were published, along with a Treasury Direction setting out the legal basis for the bonus.

The Coronavirus Job Retention (furlough) Scheme finishes on 31 October and will be replaced by the Job Support Scheme, a targeted scheme which is designed to protect viable jobs in businesses that are facing lower demand. Under the Job Support Scheme, the employer will continue to pay its employee for time worked, but the cost of hours not worked will be split between the employer, the Government (through wage support) and the employee (through a wage reduction). The Job Support Scheme will start on 1 November 2020 and run for 6 months. Employers using the Job Support Scheme will also be able to claim the Job Retention Bonus.

How will the Job Retention Bonus Scheme work?

Full details of the Job Retention Bonus Scheme can be found here: https://www.gov.uk/guidance/check-if-you-can-claim-the-job-retention-bonus-from-15-february-2021

Key details of the Job Retention Bonus Scheme are as follows:

· The bonus is a one-off fixed payment of £1,000 made to UK employers for each eligible employee that was furloughed and remains continuously employed until 31 January 2021. The bonus amount is fixed at £1,000, irrespective of the employee’s earnings, and it is taxable.

· There is no obligation on employers to pass the bonus payment to their employee.

· The Job Retention Bonus is not payable for employees that are serving a contractual or statutory notice period that started before 1 February 2021.

· Employers can still claim the Job Retention Bonus even if they are planning to make a claim for the employee through the new Job Support Scheme (see above).

· In order for employers to be eligible for the Job Retention Bonus, they must pay the employee a total of at least £1,560 (gross) throughout the following tax months:

- 6 November to 5 December 2020;

- 6 December 2020 to 5 January 2021;

- 6 January to 5 February 2021.

· The employer must pay the employee at least one payment of taxable earnings (of any amount) in each of these tax months.

· Employers will be able to claim the bonus between 15 February 2021 and 31 March 2021. The guidance will be updated again on gov.uk by the end of January 2021, giving details of how to access the online claim service.

· HMRC will withhold payment of the Job Retention Bonus where it believes there is a risk that Coronavirus Job Retention Scheme claims may have been fraudulently claimed or inflated.

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