UPDATE: The Job Retention Bonus was first referenced on the 8th July 2020. Further information followed on 31st July 2020. As things stand, we are still not able to definitively say whether or not personal service company (PSC) contractors will be able to take advantage of the Job Retention Bonus. However, there appears to be nothing that states they can’t in the existing information and guidance that has been released. The government has now said that final guidance will be unveiled in September 2020. As soon as we know more, this blog article will be updated again.
Since the Coronavirus Job Retention Scheme (CJRS) went live in March, over one million businesses have made a claim. As a result, over 9 million employees have been able to keep their job, as they have been placed on furloughed leave.
In July’s Summer Statement (8 July), Chancellor Rishi Sunak announced a series of packages “to support jobs in every part of the country, give businesses the confidence to retain and hire, and provide people with the tools they need to get better jobs.” One of these packages is the Job Retention Bonus.
More information on the Job Retention Bonus is scheduled to be available later in July. However, keep reading and find out what we already know about the Job Retention Bonus, and whether or not it could be useful for contractors operating through a personal service company (PSC).
Job Retention Bonus
One of the support packages that he announced was the Job Retention Bonus. As an incentive for organisations to keep furloughed employees into 2021, a Job Retention Bonus has been unveiled. For every furloughed worker an organisation keeps employed through to the end of January next year (2021), the business will be eligible for a £1,000 payment. The government also stated that payment will be made from February 2021.
In order to qualify for the Job Retention Bonus:
- Employees must have been furloughed at some point, in accordance with the CJRS.
- Employees must be earning over the Lower Earnings Limit of £520 per month (average) amid the conclusion of the CJRS, and the end of January 2021.
Can PSC contractors benefit from the Job Retention Bonus?
Contractors with a PSC have been able to access furlough pay in accordance with the CJRS. Churchill Knight has advised our clients that if they qualify, the CJRS is there to support them, and obtaining furlough pay is relatively straightforward (please read our blog: How to claim using the Coronavirus Job Retention Scheme). Therefore, as things stand, we do not see any reason why PSC contractors will not be able to take advantage of the Job Retention Bonus. Remember, if you can access the Job Retention Bonus, you must:
- Remain employed by your PSC until at least the end of January 2021
- Have paid yourself a salary of £520 per month, or more (average) between the end of the CJRS and the end of January 2021.
- Have been on furloughed leave at some point – in accordance with the CJRS.
Frustratingly, we cannot definitively say that personal service company contractors will be able to benefit from the Job Retention Bonus – because more information is required. As referenced earlier, this should be released in September 2020.
Contact your Churchill Knight Account Manager for more information
If you have any questions about the CJRS and the support available to contractors with a PSC, please contact your Churchill Knight Account Manager. Up to date information is also available on our blog. As soon as the government release more information, your Account Manager will be able to help you access any support packages you’re eligible for.
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