More detailed guidance on the JRB has been published – employers who intend to claim should take certain steps now.
The JRB was announced in the Summer Economic Statement to support and reward employers who retain furloughed employees after the Job Retention Scheme (JRS) closes on 31 October 2020. Detailed guidance on how the JRB will operate was published on 2 October 2020.
In summary, eligible employers who choose to claim a JRB will receive a single payment of £1,000 in respect of each employee who:
Payments made under the JRB should be brought into account as income when calculating taxable profits. Eligible employers who claim a JRB payment are also able to participate in the new Job Support Scheme (JSS).
Following interim guidance issued in August, HMRC have published further details on the JRB, which confirm that claims may be made between 15 February and 31 March 2021 (this is a hard deadline). Other key points from HMRC’s new 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 serving a statutory or contractual notice period on 31 January 2021. This includes people serving notice of retirement.
Employers may be able to claim a JRB in respect of employees transferred to them under the Transfer of Undertakings (Protection of Employment) regulations (TUPE), in certain circumstances in which TUPE would otherwise have applied, or where the PAYE business succession rules apply, provided those employees were:
It will not be possible to claim a JRB payment in respect of transferred employees who were furloughed only by their previous employer.
A JRB payment can be claimed only in relation to employees who received furlough payments funded by the JRS. If an employer made a valid claim for a JRS grant in respect of a furloughed employee, but then repaid all of the grants relating to that employee for any reason, they will not attract a JRB payment.
Meeting the minimum income threshold
For employees to meet the minimum income threshold, they must receive gross taxable payments totalling at least £1,560 in respect of the period 1 November 2020 to 31 January 2021, with at least one payment of any amount made in each of the tax months:
This applies regardless of how often employees are paid, and any circumstances that might reduce their taxable pay in the relevant tax months (such as being on statutory or unpaid leave).
HMRC will check whether employees have met the minimum income threshold based on the relevant Real Time Information (RTI) submissions. All relevant payments must be reported to HMRC through RTI before a JRB claim can be made.
What should employers do now if they plan to claim?
HMRC’s new guidance recommends that employers who intend to claim under the JRB should ensure they:
JRB payments may be delayed if HMRC are reviewing JRS claims at the time a JRB payment is claimed.
What happens next?
HMRC will issue further guidance before the end of January 2021 on how to make a JRB claim.
In the meantime, employers who intend to claim a JRB payment should confirm their eligibility and quantify any potential claims, 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 Q&A for further details on the JRS, JRB and JSS.
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