Latest Guidance on The CJRS Bonus
HMRC have issued further guidance in regards to the Job Retention Bonus which we summarise below:
The Job Retention Bonus is a £1,000 one-off taxable payment that an employer can claim for each eligible employee.
You can still claim the bonus if you make a claim for that employee through the new Job Support Scheme that commences on 1 November 2020.
You cannot claim the bonus for any employees that you have not paid using the Coronavirus Job Retention Scheme grant because you have repaid all the grant amounts you claimed for them. This applies regardless of the reason why you repaid the grant amounts.
Employees you will be able to claim for
You will be able to claim for employees that:
- you made an eligible claim for under the Coronavirus Job Retention Scheme
- you kept continuously employed from the end of the claim period of your last Coronavirus Job Retention Scheme claim for them, until 31 January 2021
- are not serving a contractual or statutory notice period for you on 31 January 2021 (this includes people serving notice of retirement)
- you paid enough an amount in each relevant tax month and enough to meet the Job Retention Bonus minimum income threshold (see below)
- If HMRC are still checking your Coronavirus Job Retention Scheme claims, you can still claim the Job Retention Bonus but your payment may be delayed until those checks are completed.
The minimum income threshold
You must pay your employee at least once during each of the following periods:
- 6 November to 5 December 2020
- 6 December 2020 to 5 January 2021
- 6 January to 5 February 2021
The total amount you pay to the employee for the above three month period must be at least £1,560 gross.
HMRC will check that your employees have been paid at least the minimum income threshold by checking information you’ve submitted through Full Payment Submissions via Real Time Information (RTI).
What payments are included in the minimum income threshold
Only payments recorded as taxable pay will count towards the minimum income threshold. Taxable pay is reported to HMRC as a single figure through Full Payment Submissions via Real Time Information (RTI).
Find examples of employees and the minimum income threshold.
Get ready to claim
Claims cannot be made until 15 February 2021. HMRC will be issuing further guidance with details on how to access the online claim service on GOV.UK by the end of January 2021.
Before you can claim the bonus, you will to need to have reported all payments made to your employee between 6 November 2020 and 5 February 2021 to HMRC through Full Payment Submissions via Real Time Information (RTI).
There are some steps you need to take now to make sure you’re ready to claim.
- still be enrolled for PAYE online
- comply with your PAYE obligations to file PAYE accurately and on time under Real Time Information (RTI) reporting for all employees between 6 April 2020 and 5 February 2021
- keep your payroll up to date and make sure you report the leaving date for any employees that stop working for you before the end of the pay period that they leave in
- use the irregular payment pattern indicator in Real Time Information (RTI) for any employees not being paid regularly
- comply with all requests from HMRC to provide any employee data for past Coronavirus Job Retention Scheme claims
Using an agent to do PAYE online and claim the Job Retention Bonus
If you use an agent who is authorised to do PAYE online for you, they will be able to claim the Job Retention Bonus on your behalf.
HMRC’s guidance will be updated by the end of January 2021 with details on how agents can claim the bonus for you.
Tax treatment of the Job Retention Bonus
You must include payments you receive under the scheme as income when you calculate your taxable profits for Income Tax and Corporation Tax purposes.
Businesses can deduct employment costs as normal when calculating taxable profits for Income Tax and Corporation Tax purposes.
Individuals with employees that are not employed as part of a business (such as nannies or other domestic staff) will not have to pay tax on grants received under the scheme.
When the government ends the scheme
You will have until 31 March 2021 to make a Job Retention Bonus claim after which the scheme will close. No further claims will be accepted after this date.