Charities could be able to access up to £9m in additional grant funding after the government lifted allowance limits that were capped by outdated European Union state aid rules.
Successful lobbying by the Charity Retail Association and Charity Tax Group highlighted how charity shops had previously been denied access to lockdown grants as the government applied the old EU state aid rules.
The bodies warned last week that the UK was no longer bound by the rules, resulting in confusion about grant limits.
The situation was being made worse by a lack of communication from government and local authorities, they said.
The new guidance means that charities with substantial retail, hospitality and leisure property portfolios, including charity shops, can now access up to £1.9m in business grants each, up from about £860,000.
An extra £9m, up from about £2.6m, will be available to charities that meet additional criteria including a 30 per cent reduction in turnover.
The bodies are calling on the Department for Business, Energy and Industrial Strategy to ensure local authorities apply the changes immediately so that charities do not miss out on the increased funding.
Robin Osterley, chief executive of the Charity Retail Association, said: “This change is great news for charity shops and the charities they help support.
“The previous cap on the maximum amount one charity could receive meant many thousands of charity shops were being denied any business grant support, which was putting the future of shops at risk.”
Richard Bray, acting chair of the Charity Tax Group, said: “It is now crucial that local authorities allow charities to make claims as soon as possible as there are deadlines for claims to be made at the end of March and May.”
The first application deadline is 31 March and more information about additional deadlines can be found here.