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Government begins to withdraw Covid business support from today

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The government’s financial support is to start tapering back from today, as the furlough scheme begins its wind down and the rates holiday for retail businesses starts to be withdrawn.

From Thursday 1 July, the Coronavirus Job Retention Scheme, which began in March 2020 and has provided a lifeline to thousands of businesses, will be scaled back, with employers having to pay towards the furlough contribution for the first time.

Staff will continue to receive 80% of their wages – up to £2,500 a month – but employers will have to pay 10% with the government stumping up the other 70%.

This tapers back to 60% and 20% from August and the scheme ends entirely after the end of September.

At its peak in May 2020 the number of people on furlough stood at 8.9 million, according to the HMRC figures. By the start of June, this number had dropped to around 1.5m people, ONS data suggested.

The business rates holiday will also start to be wound down from today.

Companies across the sector have benefited from a 100% discount in business rates since April last year, with the relief said to have impacted almost 400,000 firms.

The 15-month rates holiday ends today in its current form, with 66% relief applying from 1 July up to a maximum discount of £2m. The scheme will come to an end next April.

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