Empowering the Freelance Economy

Tax-free £1K bonus for nanny employers

Parents who used the Coronavirus Job Retention Scheme (CJRS) to furlough their nanny during the pandemic will be eligible to claim the £1,000 Job Retention Bonus and will not be liable for tax, the ICAEW has reported.

The Job Retention Bonus (JRB), announced in July 2020, provides for 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 report said.

“Individuals with employees that are not employed as part of a business (for example nannies or other domestic staff) will be eligible for the JRB, just as they were for the original and part-time furlough schemes,” stated the ICAEW.

Although the bonus will be taxable income for business recipients, individuals employing nannies and domestic staff will not have to pay tax on the JRB.

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.

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