The Job Retention Bonus Scheme - the details

Claims for the £1,000 bonus per eligible employee, agency worker or office holder must be made between 15 February 2021 and 31 March 2021.

Under furlough, it was a case of ‘pay now, check later’ to ensure businesses had sufficient cashflow to make salary payments. But with both the job support scheme (JSS) and the bonus scheme, HMRC will move to a ‘check first, pay later’ model.

Eligibility

Employers will be eligible to claim the bonus for an employee, if that individual was included in a claim under the furlough scheme and they remain continuously employed until 31 January 2021.

An employee must have received taxable pay in each of the three tax months:

• 6 November – 5 December

• 6 December – 5 January

• 6 January – 5 February

And

• The employee must have received at least £1,560 as taxable pay across those three tax months, any tax free allowance or adjustment as driven by their tax code is not deducted/added to the taxable pay. 

And

• The full payment submission for each of those three months has been sent to HMC on time and is accurate

Therefore, if an employee who is paid £2,000 in November and December and then offered no work in January would not be eligible for the bonus. Although that employee meets the minimum income threshold, as they had not received a payment in each tax month, they would not qualify.

Taxable income

The job retention bonus is taxable income for both corporation tax and income tax purposes.

However, where it is payable to an individual who also happens to be an employer of a nanny or a member of domestic staff, the bonus is not classed as part of the individual’s taxable income for the year.