HMRC updates – how to collect the 1k job retention bonus

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HMRC has published additional information on the new Job Retention Bonus, which provides a bonus to employers who keep on their furloughed employees at least until the end of January 2021.

The scheme allows employers to receive a one-off payment of £1,000 for every employee, previously claimed for under Coronavirus job Retention Scheme (CJRS), providing they:

  • remain continuously employed through to the end of January 2021
  • earn at least £520 a month on average between the beginning of November and the end of January (a total of at least £1,560 across the three months)

All employers are eligible for the scheme – including recruitment agencies and umbrella companies.

Employers will not be able to claim the bonus for those who are serving a contractual or statutory notice period, that started before 1 February 2021.

Another exemption is where a CJRS claim for an employee was incorrectly made.

HMRC continues to warn that it will crack down on fraud, and withhold payment of the bonus for any claims made under the CJRS that are suspected to be fraudulent until their enquiries are complete.

Secondary legislation for
CJRS to support employment rights

HMRC has brought forward secondary legislation to ensure that employees who have benefitted from the Coronavirus Job Retention Scheme do not lose out on certain entitlements.  

The legislation is the Employment Rights Act 1996 (Coronavirus, Calculation of a Week’s Pay) Regulations 2020.

It is intended  to ensure that statutory rights including redundancy pay, notice pay and compensation for unfair dismissal are based on an employee’s normal pay, rather than their furlough pay (potentially 80% of their normal wage).

Whilst we hope that employers will do everything they can to avoid making redundancies, this new legislation will ensure that where someone who had previously been furloughed does lose their job, they receive their full entitlements.

More information is available here.

David Nunn is Content Manager at AAT.

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