So, what changes on 1 January 2021?

Deal or no deal, the way people live and work will be different.

  • People planning to move between the UK and EU to live, work, or retire will no longer be automatically allowed to do so
  • The UK will apply a points-based immigration system to EU citizens
  • Travel rules are changing, so check your passport is still valid, that you have health insurance and the right driving documents
  • The UK will no longer make big annual payments towards the EU’s budget
  • Arrivals from the UK will stand in a different queue at passport control in EU countries
  • Businesses trading with the EU will face a lot more paperwork

Transition

Importing Goods into the UK from the EU

Exporting Goods to the EU from the UK

Virtual Christmas parties will qualify for tax exemption

HMRC has confirmed that they will accept a virtual Christmas party as an event which is capable of falling within the tax exemption rules for annual functions.

‘Having considered the scope of section 264 ITEPA03 (annual parties exemption), we are pleased to confirm that the exemption will apply to the costs associated with virtual parties in the same way that it would for traditionally held parties.

‘Therefore, the cost of providing food, entertainment, equipment and other expenses which may be incurred in hosting a virtual event, will be exempt, subject to the normal conditions of the exemption being met.

‘It is important to note that the intention of the exemption is to allow for costs of provision which are generally incurred for the purposes of the event itself, and that the event, along with any associated provision, is available to employees generally. We will be updating our GOV.UK guidance shortly.’

The rules allow employers to spend up to £150 per head (including VAT) towards the costs of an annual function such as a seasonal party, without creating a tax liability.

To qualify the party must be an annual event which is open to all staff generally, or all staff at a specific location, if the employer has more than one location. If the employer has more than one annual event in a tax year, for all the events to be tax-free the combined cost per head must be no more than £150

Gifts to employees can be tax-free

Some employers may wish to give a small gift to their employees. As long as the employer meets the relevant conditions, no tax charge will arise on the employee.

A tax exemption is available which should help employers ensure that the benefits provided are exempt and do not result in a reportable employee benefit in kind. In order for the benefit to be exempt it must satisfy the following conditions:

  • the cost of providing the benefit does not exceed £50 per employee (or on average when gifts are made to multiple employees)
  • the benefit is not cash or a cash voucher
  • the employee is not entitled to the benefit as part of a contractual arrangement (including salary sacrifice)
  • the benefit is not provided in recognition of particular services performed by the employee as part of their employment duties
  • where the employer is a ‘close’ company and the benefit is provided to an individual who is a director, an office holder or a member of their household or their family, then the exemption is capped at a total cost of £300 in a tax year.

If any of these conditions are not met then the benefit will be taxed in the normal way subject to any other exemptions or allowable deductions.

No more than £50

One of the main conditions is that the cost of the benefit does not exceed £50. If the cost is above £50 the full amount is taxable, not just the excess over £50. The cost of providing the benefit to each employee and not the overall cost to the employer determines whether the benefit can be treated as a trivial benefit. So, a benefit costing up to £50 per employee whether provided to one or more employees can be treated as trivial. Where the individual cost for each employee cannot be established, an average could be used. HMRC examples consider various gifts including turkeys, bottles of wine and gift vouchers

New Grant Announced for businesses forced to close in second lockdown

Please note: This information has been updated and you may be eligible for further support – please click here to find out more about the support available for businesses who pay business rates.

Businesses who are forced to close under the second national lockdown, which comes into force on Thursday, will be entitled to a new tiered grant of up to £3,000 per month

Those forced to closed their doors will receive grants worth up to £3,000 per month under the Local Restrictions Support Grant (LRSG).

Effected businesses will be eligible for the following:

  • For properties with a rateable value of £15,000 or under, grants to be £1,334 per month – or £667 per 2 weeks
  • For properties with a rateable value of between £15,000-£51,000 grants to be £2,000 per month, or £1,000 per 2 weeks
  • For properties with a rateable value of £51,000 or over grants to be £3,000 per month, or £1,500 per 2 weeks

Grant will be distributed by local authorities so you should keep an eye on your local council website to see what information is available – currently this is very little.

Local Business Support and Advice

Self-employment Income Support Scheme (SEISS) Grant extended

Please note: This scheme has been updated and you may be eligible to claim further Self-employment Income Support Grants – please click here to find out more.

The government is increasing its support to the self-employed over the coming months and ensuring people get paid faster than previously planned, it was announced 2nd November 2020.

  • As SEISS grants are calculated over three months, the November boost to 80 per cent, along with the 40 per cent level of trading profits for December and January, increases the total level of the third grant to 55 per cent of trading profits. That means the maximum grant will increase to £5,160.
  • The online service for the next grant will be available from 30 November 2020. HMRC will provide full details about claiming and applications in guidance on GOV.UK in due course.

Brief Guidance

Self-Employment Income Support Scheme Grant Extension

COVID-19: Arrangements for continued provision of services by CGA

We know that this is a time of unprecedented uncertainty for businesses across all sectors and we at CGA will continue to work with all clients to update, advise and provide support during this time.

We are sending out regular updates via email, sign up here.

The team are currently working from home, with Chelle and Claire working from the office.  All team members can be reached by email and the office landline is the first point of telephone contact.

The office is closed to visitors. We are contacting clients to rearrange meetings to either an alternative communication option or a revised date – we apologise for any inconvenience that this may cause but are fairly sure you will be 100% supportive of this action.

Business support: new Government website

A full range of business support measures have been made available to UK businesses and employees. With frequent updates and information in different places, it can feel overwhelming at this time. A new government website has launched to help businesses find out how to access the support that has been made available, who is eligible, when the schemes open and how to apply.

The Chancellor has set out various packages of temporary, timely and targeted measures to support public services, people and businesses through this period of disruption caused by COVID-19 and continues to do so.

Financial support for businesses during coronavirus (COVID-19)

We have therefore taken the guidance as published by the government and added more specific detail to each section and will continue to update each section as more information is provided with regard to how the package of support offered by the Government will be distributed/accessed. 
 
The links below will take you to the relevant pages on our website, which we will keep updated on a regular basis: 

To receive regular government updates as they are issued, sign up here.

Job Support Scheme (JSS) – what we know so far….

Second lockdown update 03/11/20: The new Job Support Scheme (JSS), which was the government’s replacement wage support scheme, had been set to launch on 1 November, with the government publishing 11 detailed guidance notes on the evening of 30 October to help employers in administering the same. This scheme has, however, now been postponed until the extended CJRS ends.

This is based on guidance we have available as at 26/10/2020 – further guidance and full details of the calculations are expected to be issued by the end of October for when the scheme commences on 1st November.  As soon as we know more we will issue an update.

There will be 2 different types of JSS depending on whether you need to reduce hours (JSS Open) or are legally required to close your premises as a direct result of coronavirus restrictions set by one or more of the four governments of the UK (JSS Closed).

Read GOV.UK documentation on the Job Support Scheme

JSS Open

The employee will need to work a minimum of 20% of their usual hours and the employer will continue to pay them as normal for the hours worked.

Alongside this, the employee will receive 66.67% of their normal pay for the hours not worked – this will be made up of contributions from the employer and from the government.

The employer will pay 5% of reference salary for the hours not worked (based on usual hours calculations), up to a maximum of £125 per month, with the discretion to pay more than this if they wish.

The government will pay the remainder of 61.67%, of reference salary for the hours not worked, up to a maximum of £1,541.75 per month.

This will ensure employees continue to receive at least 73% of their normal wages, where they earn £3,125 a month or less.

JSS Closed

Each employee who cannot work due to these restrictions will receive two thirds of their normal pay, paid by their employer and fully funded by the government, to a maximum of £2,083.33 per month, although their employer has discretion to pay more than this if they wish.

Employers are eligible to claim JSS Closed if their business premises at one or more locations has been legally required to close as a direct result of coronavirus restrictions set by one or more of the four governments of the UK. This includes premises restricted to delivery or collection only services from their premises and those restricted to provision of food and/ or drink outdoors.

Businesses premises required to close by local public health authorities as a result of specific workplace outbreaks are not eligible for this scheme

Eligible employers will be able to claim the JSS Closed grant for employees:

  • whose primary work place is at the premises that have been legally required to close as a direct result of coronavirus restrictions set by one or more of the four governments of the UK
  • that the employer has instructed to and who cease work for a minimum period of at least 7 consecutive calendar days

This is not a complete list of all the conditions for eligibility for JSS Closed and further guidance will be published by the end of October.

Important Information for both schemes

  • Although the scheme starts on 1st November 2020 Employers will be able to claim from 8 December, covering salary for pay periods ending and paid in November. Subsequent months will follow a similar pattern, with the final claims for April being made from early May.

If grant payments are made in 6 working days, like the current scheme, employers will need to cover the full cost of the wages for monthly employees for a period of 2-3 weeks before getting the grant income – for more frequently paid employees this will be much longer.

  • Neither the employer nor the employee needs to have benefitted from the Coronavirus Job Retention Scheme to be eligible for the Job Support Scheme.
  • Only employees who were on payroll and a valid RTI (Real Time Information) submission between 6th April 2019 and 23rd September 2020 will be eligible – if you employed someone who was paid for the first time in September and the RTI submissions were made after 23rd September – they will NOT be eligible for JSS Open and JSS Closed.
  • Employers can only claim for employees that were in their employment on 23 September 2020. If employees ceased employment after 23 of September 2020 and were subsequently rehired, then employers can claim for them
  • Employees can be on any type of contract, including zero hours or temporary contracts.
  • Employees will be able to undertake training voluntarily in non-working hours. Where time spent on training attracts a minimum wage entitlement in excess of the grant payment, employers will need to pay the additional wages.
  • Employers cannot claim for an employee who has been made redundant or is serving a contractual or statutory notice period during the claim period.
  • The Job Support Scheme grant will not cover National Insurance contributions (NICs) or pension contributions. These contributions remain payable by the employer.
  • Like the CJRS – Employers must deduct and pay to HMRC income tax and employee NICs on the full amount that is paid to the employee, including any amounts subsequently met by a scheme grant.
  • Employers must have paid the full amount claimed for an employee’s wages to the employee before each claim is made. They should also pay the associated employee tax and employee and employer National Insurance contributions to HMRC, even if the company is in administration.
  • Employees will be able to check if their employer has made a Job Support Scheme claim relating to them via their Personal Tax Account.

Reference Salary

The reference salary amounts are the same as those used for the CJRS – however the reference period has changed.

Claims should commence from the later of the date that the employee starts working reduced hours or the date when working reduced hours is confirmed in writing, not when the decision is made. Claim periods can start from 1 November 2020 onwards. Claims are subject to a maximum reference salary of £3,125 per calendar month.

Reference salary for employees with fixed pay

For employees who are paid a fixed salary, the Reference Salary is the greater of:

  • the wages payable to the employee in the last pay period ending on or before 23 September 2020
  • the wages payable to the employee in the last pay period ending on or before 19 March 2020, this may be the same salary calculated under the CJRS scheme

Reference salary for employees with variable pay

For employees whose pay is variable the Reference Salary is the greater of:

  • the wages earned in the same calendar period in the tax year 2019 to 2020
  • the average wages payable in the tax year 2019 to 2020
  • the average wages payable from 1 February 2020 (or the employee’s start date if later) until 23 September 2020

So we will definitely have some more calculations to undertake for the JSS.

Usual Hours

Employees who work fixed hours

For employees contracted for a fixed number of hours and whose pay does not vary according to the number of hours they work, usual hours are calculated based upon the greater of:

  • the hours that the employee was contracted for at the end of the last full pay period ending on or before 23 September 2020
  • the hours that the employee was contracted for at the end of the last full pay period ending on or before 19 March 2020, this may be the same number of hours calculated under the Coronavirus Job Retention scheme (NB. if employees moved to part time working, this may be varied full details will be included in forthcoming Guidance)

This should include hours paid as annual leave and statutory leave.

Employees who work variable hours

The variable hours calculation applies if either:

  • the employee is not contracted to a fixed number of hours
  • the employee’s pay depends on the number of hours they work

For employees whose number of hours varies and/or whose pay depends on the number of hours they work, the number of usual hours is calculated based on the higher of:

  • the number of hours worked in the same calendar period in the tax year 2019 to 2020
  • the average number of hours worked in the tax year 2019 to 2020
  • the average number of hours worked from 1 February 2020 (or the employee’s start date if later) until 23 September 2020

This should include hours paid as annual leave and statutory leave.

The calculation of usual hours is not and cannot be altered if the employee is expecting to work more or fewer hours than this in the future.

Links to examples:

Calculation example 1: fixed hours and fixed salary employee

Calculation example 2: employee with variable hours and variable pay

Temporary working agreements

To be eligible for the grant, employers must have reached written agreement with their employee that they have been offered either a temporary working agreement (JSS Open) or that they have been instructed to and agree to stop working for a minimum of 7 consecutive calendar days (JSS Closed).

The agreement must be available for view by HMRC on request.

This temporary working agreement must cover at least seven consecutive days.

The employee must agree to the new arrangement.

HMRC will publish further guidance on what to include in the written agreement by the end of October.

Any previous letter issued under the Coronavirus Job Retention Scheme will NOT be relevant and new letters much be issued to all employees for whom you want to claim under the Job Support Scheme.

Read GOV.UK documentation on the Job Support Scheme

Reduced rate of 5% VAT for hospitality, holiday accommodation and attractions

The hospitality and leisure industries as we all know, have been severely affected by the Coronavirus pandemic. To help businesses in these sectors to get back on their feet, the Government has reduced the rate of VAT to 5% rather than the standard rate of 20%.  This applies to certain supplies and has now been extended until 31st March 2021.

Hospitality

Food and drink supplied for consumption in the premises, for example by a restaurant or a bar, and hot takeaway food and beverages are normally liable for VAT at the standard rate of 20%. During the support period, the 5% rate will apply instead to:

  • hot and cold food for consumption on the premises on which they are supplied;
  • hot and cold non-alcoholic beverages for consumption on the premises on which they are supplied;
  • hot takeaway food for consumption off the premises on which it is supplied;
  • hot takeaway non-alcoholic beverages for consumption off the premises on which they are supplied.
  •  

Hotel and holiday accommodation

For businesses supplying hotel and holiday accommodation, the 5% rate VAT applies during the support period to:

  • supplies of sleeping accommodation in a hotel or similar establishment;
  • certain supplies of holiday accommodation;
  • charge fees for caravan pitches and associated facilities;
  • charge fees for tent pitches and camping facilities.
  • Meals provided to guests in long-term holiday accommodation (more than 28 days) will also benefit from the reduced rate, but the hire of motor caravans will not.

Admission to attractions

The reduced rate of 5% also applies during the support period in respect of admission to certain attractions which would normally be liable for VAT at the standard rate. However, if the admission fee is exempt from VAT, this will take precedence over the 5% charge and the admission charge will remain exempt.

The temporary reduction will apply to admissions to shows, theatre, circuses, fairs, amusement parks, concerts, museums, zoos, cinemas, exhibitions and similar cultural events where these are not included in the existing cultural exemption.

Impact on flat rate scheme

VAT registered businesses using the flat rate scheme should note that some of the flat rate percentages have been reduced to take account of the temporary reduction in the rate of VAT.

Firms can choose whether or not to pass on the reduction to consumers by lowering prices, although this is not mandatory.

HMRC Regains Preferential Status for Insolvencies after 1st December 2020

The Finance Act 2020 provides for HMR & C to regain preferential status for certain debts including PAYE, Employees NIC, VAT, student deductions and CIS deductions. The new status is only relevant for insolvencies that commence after 1 December 2020.

Current Preferential Creditors

At present the only creditors that have preferential status are employees for arrears of wages and holiday and Financial Services Compensation Scheme “FSCS”.

For new insolvencies where the approval date is after 1 December 2020, HMR & C will join FSCS as a secondary preferential creditor in relation to the type of debts referred to above.

The preferential status is limited to outstanding taxes which are deducted from an employee’s salary or deducted from customers and are held on behalf of The Revenue “deducted taxes”.

HMR & C will remain as an unsecured creditor for corporation tax or any other tax owed directly by the trading entity which includes all trading entities including companies, partnerships, sole traders, charities, etc.

How does this affect insolvencies?

What this means for insolvency processes including administrations, liquidations, Company and Individual Voluntary Arrangements, which commence post 1 December 20, HMR & C will jump up the queue above both secured and unsecured creditors and if there are surplus funds to distribute to creditors, HMR & C will be 2nd or 3rd in the queue after creditors with a fixed charge and employees as detailed.

Home Sweet Home – Homeworking and Tax Relief for Employees

Working from home may be an attractive option for some employees, however in the light of Covid, for some employees this is now the only option albeit temporarily.

Here we consider the tax implications of homeworking arrangements.

Your status is important

The tax rules differ considerably depending on whether you are self-employed, as a sole trader or partner, or whether you are an employee, even if that is as an employee of your own company. One way or the other though, if you want to maximise the tax position, it is essential to keep good records. If not, HMRC may seek to rectify the tax position several years down the line. This can lead to unexpected bills, including several years’ worth of tax, interest and penalties.

General rules

Generally, any costs paid on behalf of, or reimbursed to, an employee by their employer will be taxable. The employee will then have to claim the personal tax relief themselves and prove that they incurred those costs ‘wholly, exclusively and necessarily’ in carrying out their job. The word ‘necessarily’ creates a much tighter test than that for the self-employed.

In addition, the way in which the services are provided can sometimes make a substantial difference to that tax cost. For example, if the employer provides something for the employee, the rules are often much more generous than if the employee bought it themselves and attempted to claim the tax relief. A bit of advice and forward planning can often prove to be fruitful.

An exemption

The rules for employees in relation to ‘use of home as office’ contains a specific exemption from a tax charge. They allow payments made by employers to employees for additional household expenses to be tax free, where the employee incurs those costs in carrying out the duties of the employment under homeworking arrangements. ‘Homeworking arrangements’ means arrangements between the employee and the employer under which the employee regularly performs some or all of the duties of the employment at home.

The arrangements do not need to be in writing but it is advisable to do this, as the exemption does not apply where an employee works at home informally.

Where these rules are met, the additional costs can be met.

  • additional heating and lighting costs
  • additional insurance
  • metered water
  • telephone or internet access charges
  • business rates (if applicable)

Only the increase in costs incurred by the employee can be reimbursed. Costs that would be the same whether or not you work at home cannot be included. Such costs might include:

  • mortgage interest or rent
  • council tax
  • water rates

For costs such as broadband internet connection, HMRC say that if the employee is already paying for a connection before starting working from home then this is an existing expense and cannot be reimbursed tax-free. If, however, the employee is not connected to broadband and needs a connection to work from home, then this would qualify as an additional cost which the employer could reimburse tax-free. 

The same principles will apply for the cost of a domestic landline rental. Only additional costs incurred by the employee as a result of homeworking can be reimbursed by their employer tax-free.

The employer is also not permitted to reimburse tax-free any costs that put the employee in a position to work at home such as building alterations. However, the employer can provide office equipment and office furniture. These would be tax-free benefits in kind. (Although see below for tax issues that can arise where the employee provides their own equipment.)  

A simpler flat rate method is available to cover additional costs. The rate has increased from £4 a week to £6 a week from 6 April 2020. No records are required to be kept. However, to justify a higher payment, the message is: prove it!

Tax relief

The above rules only allow tax free payments to be made in specific circumstances. However, if payments are made outside of these rules or, in fact, no payments are made at all, the employee can claim personal tax relief themselves if they can prove that they incurred those costs or received those payments ‘wholly, exclusively and necessarily’ for the purposes of their job. In reality this is extremely difficult – some would say impossible – as HMRC requires the following tests to be met:

  • the employee performs the substantive duties of their job from home (i.e. the central duties of the job)
  • those duties cannot be performed without the use of appropriate facilities
  • no such facilities are available to the employee on the employer’s premises or are too far away
  • and at no time either before or after the employment contract is drawn up is the employee able to choose between working at the employer’s premises or elsewhere.

So the moral for employees is to go for tax free payments, not tax relief!

Purchases of Office Equipment

It is generally accepted that working solely on a laptop for long periods is poor practice, and can lead to discomfort and back pain. Some new homeworkers will need additional equipment including monitors, keyboards and even desks and chairs in order to make a functional office space at home. Fortunately, following an announcement on 13 May 2020, some of the unintended outcomes which could arise here have been dealt with by the Government.

Employer purchase

If the employer has purchased and provided any necessary equipment then, provided there is no significant private use, no taxable benefit in kind arises on the employee.

(If there is significant private use, then a benefit in kind will arise and so employers may wish to ensure that their employment policies make clear private use is not permitted.)

If, at a later date, ownership of the asset is transferred from the employer to the employee then a benefit in kind could arise.

Employee purchase and employer reimburses

In the current circumstances, some employees may have purchased their own equipment personally in order to get set up as soon as possible. Employers may even have advised this, and offered to reimburse the costs afterwards.

Usually, employer reimbursements of employee expenses are treated differently for tax purposes and this approach involving a subsequent reimbursement is normally taxable on the employee. This is clearly unwelcome, and therefore the announcement on of a temporary exemption from income tax and national insurance for such reimbursements is very welcome.

Temporary COVID-19 exemption

This introduces as a temporary measure for 2020/21 – there will also be, by discretion, an exemption for the period 16 March 2020 to 5 April 2020 when much homeworking will have started – provisions for any reimbursement by an employer for the cost of equipment to be exempt from income tax and national insurance as long as it was:

  • provided for the sole purpose of enabling homeworking as a result of coronavirus
  • and would have been tax exempt if provided directly by the employer.

Furthermore, any private use of the reimbursed equipment should not be significant.

As this exemption has been laid under powers provided for by section 210 of ITEPA 2003 (power to exempt minor benefits) – and equivalent sections for NICs – so any exemption is conditional on the benefit being made available to all an employer’s employees generally on similar terms. Therefore, employers should ensure that similar reimbursement terms apply to all employees that need to work from home. It will not, for example, be acceptable for directors to ensure that they are reimbursed for office equipment but other staff are not.

If at some point in the future the employee returns to work and retains the equipment, HMRC have confirmed via guidance that no benefit in kind will arise at that point.

Employee purchases and employer does not reimburse

If the employer is unable or unwilling to reimburse equipment costs then employees will need to see if they are able to satisfy the conditions to claim tax relief through capital allowances.

This requires them to demonstrate that the equipment is used in the performance of their duties and they are likely to struggle to obtain relief under capital allowances under current HMRC guidance.

Relief on office furniture such as desks and chairs will be particularly challenging as arguably they put the employee in a (more comfortable) position to do their duties, rather than being used in the actual duties themselves. .

Accordingly, employees will be best off seeking reimbursement from their employer for costs of office furniture, as tax relief from HMRC is unlikely. Where they are seeking relief for office equipment used in their duties, then tax relief is more possible.

The job retention bonus scheme

How it works and what employers should do now.

HMRC has released further guidance for employers about the job retention bonus scheme, together with a new Treasury Direction (the law governing the scheme). These new publications do not provide a great deal more information than that released earlier in the summer, but any employers considering applying for the bonus should check the criteria to ensure they will be eligible to apply when the scheme opens in February 2021.

What is the job retention bonus?

The job retention bonus (JRB) is a 1,000 one-off payment that will be paid to employers by the government for every employee they furloughed under the coronavirus job retention scheme (CJRS) and kept continuously employed until 31 January 2021. The bonus is for the employer. It does not have to be paid to employees (unlike the furlough grant). It will be taxable as a corporate receipt, so the net benefit to the business is prospectively somewhat smaller than advertised.

The aim of the scheme is quite simply to encourage employers to retain staff once the CJRS closes at the end of this month. If all furloughed staff are retained until 31 January 2021, it will apparently cost the government £9bn, though there will no doubt be corporation and income tax receipts to offset that to a material degree.

Which employers are eligible to make a claim?

You can claim a bonus if you have furloughed employees, made an eligible claim for them under the CJRS and delivered certain up-to-date payment information to HMRC.

Any employer that has repaid CJRS sums to HMRC (e.g. because trading conditions were not as bad as anticipated) will not be eligible to claim the JRB in respect of those affected employees.

Which employees are covered?

Employers can claim for employees who:

  • were furloughed and the subject of a valid CJRS claim;
  • have been continuously employed by the employer from its most recent CJRS claim in respect of them until at least 31 January 2021;
  • are not under ‘notice of termination’ (see below); and
  • have received at least one payment in each of the relevant three tax months (6 November 2020 to 5 February 2021), the total gross value of which must be at least 1,560; HMRC has produced examples of employees and the minimum income threshold for these purposes

What will you able to claim?

  • £1,000 per employee who was furloughed and is still employed by you on 31st January 2021 and has not been served redundancy notice or any other form of notice to terminate their employment.
  • Minimum income threshold must be met as follows:
    • Employees must be paid at least £1,560 gross taxable pay throughout the months:
      • 6th November to 5th December  2020
      • 6th December to 5th January 2021
      • 6th January to 5th February 2021
  • Please note the employees must have received pay in each of the months to be eligible for you to claim the £1,000 even if the total is above £1,560.

Employers can claim for all employees who meet these criteria, including office holders and agency workers, provided in all cases that a valid claim was made for them under the CJRS.

If the employer gives notice before the end of January, then that is that and no JRB claim can be made. What is slightly unclear is what happens if it is the employee who gives notice. The guidance suggests that an employer would not be eligible to claim in respect of that employee because they would be ‘serving a contractual or statutory notice period’, which would seem to cover notice given by either party. The Treasury Direction on the other hand appears to refer to the employer not ‘terminating the employee’s employment’ and mentions employees ‘on notice of termination’, which would seem to suggest that provided the employee is still in employment on 31 January, the employer could make a claim for them even if they have resigned and are working out their notice. It would seem unfair that an employer could forfeit the JRB through no fault of its own (and despite having incurred all the costs of keeping the employee on since the end of their furlough) but at this stage, the safest bet would probably be to assume that you cannot claim in respect of employees who give notice before the end of January.

How can employers claim the bonus?

There will be another online system for claiming the bonus. Further guidance is to follow on how to access the online system once it has been set up.

When can employers submit their claim?

Employers will be able to make a claim between 15 February and 31 March 2021.

What about employees who have TUPE’d across?

According to the guidance, new employers may be eligible to claim the JRB in respect of employees of a previous business who have transferred across under the TUPE regulations, but only where the transferred employees have been furloughed and successfully claimed for under the CJRS by the new employer, thereby excluding as a start all those incoming after 31 October this year.

What if you are contemplating redundancies?

As set out above, employees will have to be still in employment and not under notice on 31 January next year for a valid claim to be made in respect of them. Any redundancy notices that are served prior to the end of January 2021 will, therefore, mean the employer cannot make a claim in respect of those employees.

Is there any link with the job support scheme?

The two schemes are separate, but the guidance for the JRB makes it clear that employers will be able to make a claim for a bonus even if they use the JSS, i.e. place staff on reduced hours, provided, of course, they can satisfy the minimum income threshold referred to above (1,560 over the relevant three-month period).

What should employers do now?

Accurate record-keeping is key to avoid any claim for the JRB being jeopardised. HMRC advises that employers take the following steps now to ensure they are ready to make a claim:

  • Still be enrolled for PAYE online.
  • Comply with their PAYE obligations to file PAYE accurately and on time via real time information (RTI) for all employees between 6 April 2020 and 5 February 2021.
  • Keep their payroll up to date and ensure they report the leaving date for any employees that stop working for them before the end of the pay period that they leave in.
  • Use the irregular payment pattern indicator in RTI for any employees not being paid regularly (this will include those payments made to staff to ensure that they are paid something in each of the three tax months from November to February referred to above).
  • Comply with all requests from HMRC to provide any employee data for past CJRS claims.