Charities missing out on “millions of pounds” as Government applies wrong state aid rules, study reveals

Charities “may be missing out” on millions of pounds of support as the Government continues to apply old state aid rules, it has been revealed.

The report, published by the Charity Retail Association (CRA), suggests that as many as half of all UK charity shops could be missing out on essential support.

According to the research, the not-for-profit sector is being denied access to lockdown grants as the UK is wrongly applying EU state aid rules, despite no longer belonging to the single market.

Under the Government’s financial support package, charity shops required to close due to national lockdown restrictions are entitled to one-off grants of up to £6,000, plus an additional £2,000 for every 28 days they are required to stay shut.

These grants can be used to cover the costs of business, such as rent, employment and utility bills.

However, because the Government continues to apply the old state aid rules, charity shops in the UK are limited to €1 million (approx. £0.86 million) in lockdown grants plus an additional €3 million (approx. £2.59 million), subject to a range of conditions. Even in the EU, these limits have been increased to reflect the severity of the pandemic.

Smaller charity stores eligible for lockdown grants are also “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”, the CRA said.

Calling on the Government to support the sector, 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.”

Richard Bray, Acting Chair of the Charity Tax Group, added: “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.”

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