Will you be able to claim the job retention bonus?

Will you be able to claim the job retention bonus?

Many employers have been asking us lately if they will be able to claim the job retention bonus following the recent announcements by the Chancellor.

If you are eligible, make sure you claim and don’t miss out!

The Job Retention Bonus explained

HMRC will make a one-off payment to the employer of £1,000 for each employee (including directors) where a previous job retention scheme (or furlough) claim was made.

Each employee must earn an average of £520 a month during the period the 1st of November 2020 to the 31st January 2021 (total earnings of £1,560 in total for the period).

This is good news for seasonal workers or those who hours may vary, especially around the Christmas period.

They can’t earn all of this amount in just one month however, they need to have some earnings in each of the three months in order to be eligible.

If you need clarification on whether any employees returning on less hours would qualify please do get in touch.

The employees must have been included on a previous job retention scheme grant claim submitted to HMRC. They must also have continued to be employed from the date the last claim was made right up until the 31st January 2021.

Whilst all employers are eligible for the bonus scheme, they must ensure they continue to file their payroll submissions and pay any PAYE and NI liabilities on time and keep their payroll records up to date. Not doing so risks delaying any bonus claims or may mean they are not paid at all.

If an employee hands in their notice or the employer gives the employee notice before the 1st of February 2021, the bonus isn’t claimable, regardless of amounts paid to them.

How can I make the claim?

Claims can only be made once the January 2021 payroll submission has been made. From February 2021, it is envisaged that the claim process will be much the same as that of the current Job retention scheme, done online through the GOV.UK website.

Further guidance on this and other areas of the scheme are expected in September 2020. The current HMRC guidance is available here.

How should I record any bonus received when doing my bookkeeping?

Any amounts received should be recorded as other income in your bookkeeping software, not offset against your wages costs. This is the same as any amounts received under the current job retention scheme.

The bonus is taxable, meaning Corporation Tax will be payable on any amounts received, subject to how the company has otherwise performed during it’s accounting period.

Please get in touch with us if you would like any further details or guidance.