The Job Retention Bonus — Could It Help You Save Jobs?
If you have had employees on furlough during the COVID-19 lockdown, you will be aware that the scheme's gradually winding down and will end soon. This is the point where you will need to decide which positions, you are going to be rebuilding and which you are going to make redundant.
However, there is one more opportunity to get support from the Government which could make it easier to keep more jobs — the Job Retention Bonus.
The Furlough Scheme and Its End
Since the beginning of the lockdown, the government has been offering to support businesses furloughing their employees, paying 80% of their salaries plus Pension and National Insurance contributions. To qualify for this, initially, the employee could take no part in the business, but since the beginning of July, employees were able to work part-time and be furloughed for the rest.
This is gradually being wound down. Employers now have had to pay for Pensions and National Insurance, while the Government's payments will reduce to 70% in September and 60% in October.
The scheme will end on 31st October 2020.
The Job Retention Bonus
In spite of the furlough scheme ending, though, there are still payments available. Businesses are entitled to claim £1,000 for each furloughed employee they take back — but there are two main conditions:
The employee must continue in employment (and not serving redundancy notice) till 31st January 2021.
The employee's average monthly pay between 1st November 2020 and 31st January 2021 must be at least £520.
However, situations will qualify where employees return to work during this period after leaving for paternity/maternity, military reservist duty etc. The scheme can also be carried over if the business is taken over, as long as CJRS claims are made for each employee.
The Longer Term
The bonus of £1,000 for each employee will help, but it may not be enough to enable you to keep all your staff on — that depends on how your business has coped with the lockdown and how long it's taking to build up again.
The Chancellor, Rishi Sunak, has indicated his intention to announce measures this autumn to help businesses rebuild, but how effective these will be, remains to be seen.
The Chancellor has said that the Government "will support jobs and businesses as we come out of this crisis, just as we did, as we came into it."
Hopefully, these words will be backed up with effective action, but it's not sensible to wait for Government policy to do everything.
If your Business is to rebuild and thrive beyond the furlough, you need to make realistic plans based on a full understanding of your financial position. Give us a call to find out how Grace Certified Accountants can help you.
I hope this information helps your business run more smoothly through these difficult times.
Director & Managing Partner
Grace Certified Accountants