The Job Retention Bonus is a taxable payment and therefore businesses will need to include the amount as if they received some income and pay the associated tax. However, if you employ someone in a personal capacity (such as a nanny), the Job Retention Bonus will not be taxable. Essentially, because the person is not running a business, they do not have to pay tax on the payment they receive. This is complete nonsense and establishes an advantage for those that are not operating a business.
In order to incentivise businesses to return and retain furloughed employees to the workplace, the Government is offering employers £1,000 for each eligible employee kept continuously employed until 31 January 2021. To then tax businesses, but not individuals who employ domestic staff, is completely unfair. It won’t go down well with businesses who are still struggling.
Clearly the policy objective behind the Job Retention Bonus is to encourage and retain employment, but not at the expense of businesses.
I think the Government have got this wrong and it would have made sense to exclude personal employees from the Job Retention Bonus scheme. At the very least, the payment should be taxable on the same footing.