COVID Supports: How Charity Shops Almost Fell Through the Cracks

Posted on
9 Apr 2021
by The Wheel
An image of some coats hanging on a rack.

Charity shops were ineligible for the COVID-19 Restrictions Support Scheme (CRSS) due to their tax structure, but can now avail of Small Business Assistance Scheme (SBAS) following campaign by representative bodies.

In Ireland, charity shops take in about €100m per annum, employ approximately 800 staff, provide a bridge to employment for 2,500 people, and have an estimated 7,000 volunteers. They’re a vital funding source for charities, turning donors’ second-hand donations into monetary ones.

They’re also an affordable source of clothing for people struggling financially — in many cases, charity shops are found in places of isolation, social deprivation, and often in areas that aren’t at all attractive to other businesses — and play a key part in the circular economy by giving clothes a second lease on life.

Because of their unique role in society, however, the future of many came under threat when it turned out they didn’t qualify for COVID-19 supports designed for other retailers.

Exclusion from COVID-19 Restrictions Support Scheme (CRSS)

The Government introduced the CRSS in 2020 to support businesses significantly affected by lockdown measures. It covers 10% of the average weekly turnover of the business in 2019 up to €20,000, plus 5% on turnover over €20,000, through an Advance Credit for Trading Expenses (ACTE). To qualify, businesses must meet specific tax criteria.1

Charity shops, because they are exempt from certain levies, found themselves unexpectedly excluded from the scheme and struggling to stay afloat.

As far as possible, they used a combination of government supports to keep going, including the Temporary Wage Subsidy Scheme (TWSS) and Employment Wage Subsidy Scheme (EWSS), as well as their own reserve funds. In continued lockdown, however, this model couldn’t remain sustainable.

An appeal to Government

The Wheel, the Charity Shops Association, and Charities Institute Ireland came together to appeal to Government for inclusion in the scheme.

“Our objective is to avoid the consequences of charity shops being forced to close,” they wrote. “By not obtaining support like other retail outlets via CRSS they may be unable to re-open or may have to permanently lay off charity shops’ staff.

“If this happens, not only will the charity lose a vital source of unrestricted fundraising income, our communities will lose a source of affordable goods (many vulnerable communities rely on charity shops for essential services, clothes, etc.), and potentially lose local, community-based employment as well.

“Local communities are already severely affected by the COVID-19 pandemic. Charity shops need immediate and urgent support to make a viable environment for the reopening of community charity shops and the associated employment and volunteering.”

Recognition of charity shops’ struggles

Following representations to the Departments of Finance; Rural and Community Development; and Trade and Employment; the group is delighted to welcome the recently announced Small Business Assistance Scheme (SBAS), which includes charity shops as eligible businesses and will support their continued operation.

Tony Ward, Director of Finance at The Wheel, commented, “Charity Shops are a very unique part of the overall charity sector. Not only do they help charities to raise funds, they provide employment, volunteering opportunities, and act as a low-cost, high-quality retail option for many vulnerable communities throughout the country.

“It may have been an oversight to have excluded them from the CRSS, but inclusion in the SBAS will provide an important lifeline for many charity shops, allowing them to continue during lockdown and hopefully re-open quickly once restrictions are eased.”

The Wheel is always working to create the conditions for the community and voluntary sector to maximise its contribution to society. Read more about our policy and campaigns work, and become a member today.