ICAEW.com works better with JavaScript enabled.
Coronavirus support

Guidance on the Job Retention Bonus

Information on the UK government's Job Retention Bonus which will provide a one-off payment to businesses that retain previously furloughed staff until the end of January 2021.

Last updated: 4 October 2020, 22:15

The Job Retention Bonus (JRB) forms part of the UK government's support package for organisations during the COVID-19 pandemic.

What you need to know

The JRB was announced in July 2020. This is

  • a one-off payment to employers of £1,000,
  • for every employee for whom the employer has made a valid claim under the CJRS and who remains continuously employed through to 31 January 2021.

Eligible employees must earn at least £1,560 in total for the period between 1 November 2020 and 31 January 2021, with at least one payment being reported through RTI in each month.

The bonus will be taxable, so the business must include the whole amount as income when calculating its taxable profits for corporation tax or income tax.

Employers will be able to claim the JRB through gov.uk after they have filed their RTI returns for January.

Payments will be made to employers from February 2021.

Individuals with employees that are not employed as part of a business (such as nannies or other domestic staff) are also eligible for the JRB, just as they have been for the original and also the part-time furlough schemes, but will not have to pay tax on grants received under the scheme. 

Rules for employers

All employers are eligible for the scheme including recruitment agencies and umbrella companies. The employer must:

  • have a UK bank account;
  • have complied with their obligations to pay and file PAYE accurately and on time under the RTI reporting system for all employees to the end of January 2021; and
  • be up-to-date with payroll obligations and have addressed all requests from HMRC to provide missing employee data in respect of historic CJRS claims. 

Rules for employees

Each employee must have been:

  • furloughed and the subject of an eligible Coronavirus Job Retention Scheme claim;
  • continuously employed by the relevant employer from the time of the employer’s most recent CJRS claim for them, to 31 January 2021; and
  • paid a total of at least £1,560 for the period 1 November 2020 to 31 January 2021. The employee does not have to be paid £520 in each month, but must have received some earnings in each of the three calendar months that have been paid and reported to HMRC via RTI.

Claims may be made for employees who are office holders, company directors and agency workers, including those employed by umbrella companies. These criteria must be met regardless of the frequency of the employee’s pay periods, their hours worked or rate of pay.

Employees who have returned from statutory parental leave or who are military reservists returning to work after 10 June 2020, for whom a CJRS claim has been made, all qualify provided the other eligibility criteria are met, as do employees who are on fixed term contracts.

Note that the employee must not be serving a contractual or statutory notice period, that started before 1 February 2021.

Employees transferred under TUPE or due to a change in ownership

A new employer may be eligible to claim the JRB in respect of employees of a previous business which were transferred to the new employer if either TUPE applies, or the PAYE business succession rules apply to the change in ownership.

A new employer may also be eligible to claim the JRB in respect of the employees associated with a transfer of business from the liquidator of a company in compulsory liquidation where TUPE would have applied were it not for the company being in compulsory liquidation.

To claim the JRB under these circumstances the transferred employees must have been furloughed and successfully claimed for under the scheme by their new employer. An employer will not be eligible for the JRB in respect of any employee transferred under TUPE or under the business succession rules after 31 October 2020.

Legislation and HMRC guidance

ICAEW Know-How from the Tax Faculty

This guidance is created by the Tax Faculty, recognised internationally as a leading authority and source of expertise on taxation. The Faculty is the voice of tax for ICAEW, responsible for all submissions to the tax authorities. Join the Faculty for expert guidance and support enabling you to provide the best advice on tax to your clients or business.