Tuesday, 25th August 2020
“Work from home if you can”
“Go to work if you can”
Which statement is right? Are you confused?
There isn’t a ‘one-size fits all’ approach to this which is why the government has tried to offer flexible alternatives to help support employers to keep their staff in employment. With all manner of funding options the Coronavirus Job Retention Scheme (CJRS) has proved to be a life saver for many employees up and down the country. The introduction of flexible furlough has meant that those who could not work, may now return on a part-time basis and still be supported by the job retention scheme.
But what happens when the scheme ends?
At the time of writing this article the government’s plan is to cease the Coronavirus Job Retention Scheme on 31st October 2020. This means that support with payroll currently offered to employers will stop, with the final grant being awarded following the October payroll submissions. Claims need to be made by the end of November and then that is it!
There is mounting pressure from all political sides, including unions, high profile employers and other nations to extend this scheme. At the moment we don’t have any further information and when we do, Onyx will be forefront in sharing the next CJRS Chapter!
What do we know?
The government is not abandoning our nation of employers!
They have introduced a package that will encourage employers to keep their previously furloughed staff on the payroll with a very tempting digestif! Chin chin to that!
Let us introduce the Job Retention Bonus – ta da!!
What is the Job Retention Bonus?
This is a one-off payment, payable to employers at a rate of £1,000 for each employee who was previously furloughed at some point up to the cessation of the scheme on 31st October 2020 and has remained in continuous employment up to 31st January 2021.
That was a bit of a mouthful, but we cannot break it down any further otherwise we would distort the very nature of the bonus.
Is there a catch? Of course there is! Eligible employees must earn at least £520 a month on average between 1st November 2020 and 31st January 2021. This covers those who may earn more or less from one month to the next but across the three months the average is considered.
A claim for the Job Retention Bonus can only be made after the PAYE submissions have been completed for January 2021 and the bonus will be paid out to employers from February 2021.
Which employers can make a claim?
All employers are eligible provided they have previously used the CJRS to claim the grant.
However, if there is evidence that the employer made an incorrect claim for an employee then they will not be entitled to claim the bonus for that employee.
Employers should ensure that they have:
- complied with their obligations to pay and file PAYE accurately and on time under the Real Time Information (RTI) reporting system for all employees
- maintained enrolment for PAYE online
- a UK bank account
Employers must keep their payroll up to date and accurate and address all requests from HMRC to provide missing employee data in respect of historic CJRS claims. Failure to maintain accurate records may jeopardise an employer’s claim.
HMRC will withhold payment of the Job Retention Bonus where it believes there is a risk that CJRS claims may have been fraudulently claimed or inflated, until the enquiry is completed.
Which employees an eligible employer can claim the Job Retention Bonus for
Claims will only be accepted for employees that were eligible for the scheme. Where a claim for an employee was incorrectly made, a Job Retention Bonus will not be payable.
Employers will be able to claim for employees who:
- were furloughed and had a CJRS claim submitted for them that meets all relevant eligibility criteria for the scheme
- have been continuously employed by the relevant employer from the time of the employer’s most recent claim for that employee until at least 31st January 2021
- have been paid an average of at least £520 a month between 1st November 2020 and 31st January 2021 (a total of at least £1,560 across the 3 months). The employee does not have to be paid £520 in each month, but must have received some earnings in each of the three calendar months that have been paid and reported to HMRC via RTI
- have up-to-date RTI records for the period to the end of January
- are not serving a contractual or statutory notice period, that started before 1st February 2021, for the employer making a claim
Employers can claim the Job Retention Bonus for all employees who meet the above criteria, including office holders, company directors and agency workers, including those employed by umbrella companies. The above criteria must be met regardless of the frequency of the employee’s pay periods, their hours worked and rate of pay.
How to claim the Job Retention Bonus and other key points
Full guidance has yet to be made available, however the claim window will open in February 2021 and be via the HMRC website.
The bonus is a fixed amount of £1,000 per eligible employee and is payable directly to the employer.
This is a taxable bonus and must be included as income in the accounts of the business. The same rules apply for companies, partnerships and self-employed businesses running a payroll.
Employers should ensure that their employee records are up-to-date, including accurately reporting their employee’s details and wages on the Full Payment Submission (FPS) through the Real Time Information (RTI) reporting system.
Employers should also make sure all CJRS claims have been accurately submitted and any necessary amendments have been notified to HMRC.
Do you need any help?
Onyx has been processing furlough claims since the scheme began and our team of experts are on hand to assist with all your payroll queries and concerns.
As businesses start the process of returning to a new way of operating, there is so much to manage and with the usual seasonal festivities fast approaching, payroll, furlough claims and job retention bonus considerations are perhaps the last things that any business wants to be burdened with.
Why not give us a call and let us take the pressure off for a while. Our in-house payroll department can take-over all payroll processing, including pension calculations, HMRC submissions along with the background paperwork ready for the end of year.
Do you feel that unemployment is the only answer?
This will be inevitable for some employers and we would not want you to go through this decision alone.
Our HR partners are on hand to go though your options and we can help put you in touch with the HR Team who will assist with the utmost of sensitivity during what must already be a very difficult time for both you as an employer and for your valued staff.
Contact us now to find out more.
GET IN TOUCH WITH ONYX
Need help with your payroll or calculating the flexible furlough rates for your part-time staff? Not sure if you can claim the Job Retention Bonus?
Contact us now or e-mail us at firstname.lastname@example.org for a FREE no obligation consultation.
Got any questions or queries? Our friendly team of tax specialists are happy to help. Just drop us a line! Call us on 0121 753 5522 or 01902 759 800.
Keep up to date with the latest announcements by visiting our dedicated page https://onyx.accountants/covid/