The Government's plan to make charities pay royalties to play music will apply to each charity shop individually and could cost charities that run shops a total of more than £500,000 a year, according to the Association of Charity Shops.
The association, which represents more than 300 charities that have shops, says its members will have to pay an average of £1,800 a year if they want to continue playing music.
Earlier this month, the Government announced that it would support proposals to remove the charity exemptions from paying fees to Phonographic Performance Limited, which represents the interests of music producers and performers.
Charities already pay fees for music to the Performing Rights Society, which represents music writers, composers and publishers. Under the proposed new system they would pay one fee that would be split between the PRS and PPL.
A spokesman for PPL said that charities would be charged per shop, rather than paying a one-off fee to play music in all their shops.
He said the cost per charity shop had not been decided, but the amount was likely to be less than £100 a year. There are approximately 7,500 charity shops in the UK, according to the Association of Charity Shops.
David Moir, head of policy and public affairs at the ACS, said the association would meet spokesmen from the opposition parties and backbench MPs to urge them to pressurise the Government over the plans, which are due to come into force on 6 April 2010.
"Our members are horrified about the proposals," he said.
"The music industry already collects about £17m in royalties each year, so the amount from charity shops won't make that much difference, but it will certainly hit our shops very hard."