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The Independent Automotive Aftermarket Federation

Job Retention Bonus: clarification of the scheme from Lawgistics

Date: Tuesday 13 October 2020

Back in July 2020 the government announced that, for every employee who was on furlough at some point and was in continuous employment until the end of January 2021, a bonus of £1,000 would be paid.

There is now a detailed government guide and a dedicated Treasury direction, which sets out the full provisions and eligibility criteria. The only part still missing is how to make a claim, and this will be added in by the end of January 2021, closer to the claim period opening date.

The guide can be found here: 

Employers will be able to claim the bonus between 15 February 2021 and 31 March 2021. No claim can be submitted after the claim period ends.

The bonus amount of £1,000 has been confirmed. Importantly, the guidance suggests that the bonus does not have to be passed to the employee and may be used for other purposes in the business. The bonus will count as taxable income.

To qualify to claim the bonus, the employer must:

  • Still be enrolled for PAYE online when the claim for the bonus is made;
  • Comply with PAYE obligations to file PAYE accurately and on time reporting for all employees between 6 April 2020 and 5 February 2021, not just in respect of those employees for whom the bonus is claimed;
  • Keep payroll up to date and make sure the leaving date for any employee who stops working is reported before the end of the pay period in which this employee leaves;
  • Use the irregular payment pattern indicator in Real Time Information (RTI) for any employees not being paid regularly;
  • Comply with all requests from the HMRC to provide any employee data for past Coronavirus Job Retention Scheme claims.

The bonus may be claimed for each employee who meets these criteria:

  • For this employee an eligible claim was made under the Coronavirus Job Retention Scheme. This means that the employee had to be on furlough, including the flexible furlough, for any duration as long as a valid claim for the furlough grant was made. This also means that if the claim for furlough was found to be invalid or withdrawn in full, the bonus for this employee cannot be claimed;
  • The employee must be employed continuously from the end of the last furlough claim period until 31 January 2021 and not be serving notice terminating employment on the latter date;
  • An eligible employee must satisfy the minimum payment requirements:
    • The employer must make a taxable payment to this employee in each of these three periods: 6 November to 5 December 2020; 6 December 2020 to 5 January 2021; 6 January to 5 February 2021;
    • For the whole period from 6 November 2020 to 5 February 2021 the qualifying employee must be paid in total at least £1,560.

The government guide has a link to examples illustrating the minimum payment requirements.

Company officers count as employees for the purposes of the job retention bonus.

A claim under the new Job Support Scheme will not invalidate the bonus entitlement.