Charity shops denied lockdown grants due to the unnecessary application of EU rules

UPDATE: After nine months of concerted lobbying effort by the Charity Retail Association and Charity Tax Group, charities have welcomed news that COVID-19 business grant allowances have been increased by the Government. Charities with substantial property retail, hospitality and leisure property portfolios, including charity shops, can now access up to £1m of extra funding with an additional £9m available if a range of eligibility criteria are met. Read more here.

Businesses on the high street including charity shops and a wide range of other retailers are being denied access to business saving lockdown grants as the UK Government is continuing to apply EU state aid rules despite the UK no longer being bound by them. This problem is compounded by confusion among local authorities which means that even eligible high street businesses are struggling to access grants. Retailers are urging the Government to use next week’s Budget to ensure that all businesses required to close during the lockdown are provided with access to lockdown grants.

Across the UK, a range of business grants have been announced for high street businesses required to close due to lockdown restrictions. For a medium-sized shop in England, these grants are worth a one-off sum of £6,000 plus £2,000 for every 28 days that they are required to stay closed. These grants are essential to pay major business overheads such as rent, employer contributions to furlough costs and utility costs.

The UK Government is continuing to apply EU rules that were in place last year even though the EU has itself amended these rules to make them substantially more generous. Businesses in the UK are now being limited to €1 million in lockdown grants plus an additional €3 million subject to a range of conditions. In the EU these limits have since been increased to €1.8 million and €10 million respectively. There is no reason why the UK Government cannot deliver greater support to the UK high street.

Also, even those businesses that are eligible for closure grants are facing significant obstacles in applying for them due to a lack of communication from central Government and local authorities applying the wrong limits or incorrectly telling businesses that they are not eligible.

Robin Osterley, Chief Executive of the Charity Retail Association said:

“As many as half of the UK’s charity shops are unable to access vital lockdown grants due to the inexplicable application of EU state aid limits which the EU itself no longer applies. This is an issue that needs urgent attention if the UK Chancellor is going to fulfil his commitment to do “whatever it takes” to support the country through this crisis. We are calling on the Chancellor to use the Budget next week to help support the future of the high street for future generations.”

Richard Bray, Acting Chair of the Charity Tax Group said

“All High Street charity shops are in need of support.  Lockdown grants are a perfect opportunity for the Chancellor to recognise this.  It would be a tragedy if dithering over EU state aid rules that no longer apply to us should scupper access to what will be a lifeline for many charities.  We just hope that the Chancellor will have the foresight to recognise this.”

Notes to editors:

The Charity Tax Group (CTG) was set up in 1982 to make representations to Government on charity taxation and it has since become a leading voice for the sector on this issue. CTG has over 800 members of all sizes representing all types of charitable activity, including property networks such as charity shops. For further details or comment, please contact the CTG Secretariat on 02072221265 or email [email protected].

The Charity Retail Association is the only body in the UK which represents the interests of charity retailers. We represent around 80 per cent of all charity stores in the UK. Our members range from national chains to individual hospice shops, and everything in-between. For further details or comment, call our Communications Manager, Rosie Slavov, on 0203 869 1268 or email [email protected].