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HMRC publish additional guidance on the Job Retention Bonus

HMRC publish additional guidance on the Job Retention

Further details on the JRB have been released – and employers who intend to claim should review payroll records and JRS claims.

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The Job Retention Bonus (JRB) was announced in the Summer Economic Statement, but it triggered several important questions: Will all previously furloughed employees qualify? What does continuous employment mean? Do employers need to act now to prepare for a claim? Detailed guidance is expected in the autumn, but we now have a few further details.

Background

The JRB is a measure designed to support and reward employers who retain furloughed employees after the Job Retention Scheme (JRS) closes on 31 October 2020.

When the JRB was announced, the Chancellor confirmed that eligible employers who choose to claim will receive a single payment of £1,000 in respect of each employee who:

  • At any point in time was validly furloughed and claimed for under the JRS;
  • Earns on average at least £520 per month between 1 November 2020 and 31 January 2021; and
  • Remains in continuous employment until at least 31 January 2021.

JRB payments can be claimed after submission of the Real Time Information (RTI) payroll returns for January 2021 and will be paid in the following month. JRB payments will be taxable on the employer.

Key points from HMRC’s new interim guidance on the JRB are summarised below.

Will all furloughed employees attract a JRB payment?

In addition to the basic eligibility criteria summarised above, the employee must not be under notice of termination of employment on 31 January 2021. Also, the employer’s RTI records must be up to date.

HMRC’s new guidance confirms that employers may be able to claim in respect of employees transferred to them under the Transfer of Undertakings (Protection of Employment) regulations (TUPE), or where the PAYE business succession rules apply, provided those employees were:

  • Transferred to the new employer prior to 31 October 2020; and
  • Validly furloughed by their new employer.

It will therefore not be possible to claim a JRB payment in respect of transferred employees who were furloughed only by their previous employer.

What does ‘continuous employment’ mean?

For the purposes of the JRB, a furloughed employee’s ‘continuous employment’ will be measured from the date of the most recent JRS claim in which they are included.

What should employers do now if they plan to claim?

HMRC’s new guidance states that JRB claims may be jeopardised if the employer’s payroll records are inaccurate or out of date. It also says employers should ensure their JRS claims have been accurately submitted, and HMRC have been notified of any necessary amendments.

JRB payments will be withheld if HMRC believes JRS claims have been fraudulently claimed or inflated. This is a clear indication that good JRS and general payroll return compliance are necessary preconditions to claiming a JRB payment.

What happens next?

Further detailed guidance on the JRB is expected in the autumn. Employers will need to confirm their eligibility and quantify any potential claims once that guidance is available. In the meantime, employers who intend to claim the JRB should ensure their payroll records are accurate and up to date, and that claims submitted under the JRS – both past and future – are supportable with any errors addressed.

See our updated Q&A for further details on the Job Retention Scheme.

For further information please contact:

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