The bonus, announced by Chancellor Rishi Sunak as part of his Plan for Jobs last month, will see businesses receive a one-off payment of £1,000 for every previously furloughed employee if they are still employed at the end of January 2021.

The scheme is designed to continue to support jobs through the UK’s economic recovery from coronavirus by encouraging and helping employers to retain as many employees who’ve been on furlough as possible.

Guidance issued by HMRC states:

• employers will receive a one-off payment of £1,000 for every employee who has previously been furloughed under Coronavirus Job Retention Scheme (CJRS), if they remain continuously employed to the end of January 2021
• to ensure the jobs are meaningful well-paid, employees must earn at least £520 (the National Insurance lower earnings limit) a month on average between the beginning of November and the end of January
• those who were furloughed and had a claim submitted for them after the 10 June (when the CJRS closed to new entrants), because they were returning from paternal leave or time serving as a military reservist will also be eligible for the bonus as long as they meet the other eligibility criteria
• employers will also be eligible for employee transfers protected under TUPE legislation, provided they have been continuously employed and meet the other eligibility criteria and the new employer has also submitted a CJRS claim for that employee

As the scheme is designed to protect jobs, those who are serving notice for redundancy will not be eligible for the bonus.

When employers will be able to claim the Job Retention Bonus

From February 2021, employers will be able to claim the Job Retention Bonus through GOV.UK. More detail about this process will be published in guidance by the end of September 2020.

How much employers will be able to claim

The Job Retention Bonus will be a one-off payment of £1,000 to the employer for every eligible employee that is claimed for. The bonus will be taxable, so the business must include the whole amount as income when calculating their taxable profits for Corporation Tax or Self-Assessment.

What employers should do now if they intend to claim the Job Retention Bonus

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 of their Coronavirus Job Retention Scheme claims have been accurately submitted and any necessary amendments have been notified to HMRC.