On 2 April 2026, the government published its response to the consultation on implementing the new subscription contracts regime, which is expected to come into force in Spring 2027. Further information on how the Digital Markets, Competition and Consumers Act 2024 affects charities is available here and the key takeaways that all charities need to know in our blog here.
Whilst this new regime is not specifically aimed at charities (the government is seeking to enhance consumer cancellation rights in the context of a cost of living crisis and squeeze on household incomes), there were concerns that this new regime, and in particular its “cooling-off” period cancellation rights, would impact charities and their membership subscriptions by:
- Potentially facilitating abuse – through membership subscriptions being used to secure member benefits during the “cooling-off” period before cancellation and a refund of the subscription amount.
- Causing issues with the application of Gift Aid to the subscriptions, given the potential for repayment under the “cooling-off” rules and the prohibition on Gift Aid applying to payments subject to refund.
- Creating an additional compliance burden for charities.
Pleasingly, the government has listened to these concerns and has committed to “legislate to exclude charitable memberships from the DMCCA. Broadly, this will exclude contracts which are between a charity and a consumer and that allow consumers to attend performances, see collections, or visit places (for example, museums, galleries, historical properties, landscapes, wildlife, performing arts) which are related to their charitable purpose. This will mean that such memberships are not subject to additional regulation under the subscription regime.”
It will be readily apparent that not all subscription income for charities will necessarily be within the scope of the carve out as expressed by the government above, so charities and their advisers should continue to keep a watching brief on these rules as they develop in the coming year. The government did, however, reiterate the existing HMRC guidance that compliance with consumer protection rules does not amount to a condition as to repayment for these purposes (para 3.13.4 of Chapter 3: Gift Aid). It will be interesting to see if the current reference to this being HMRC’s “interim position” is updated.
Overall the government’s recognition of the importance of charities, and the need for some kind of carve out, is certainly good news for the sector – and though much will depend on the specific terms of the relevant secondary legislation which carves out these charity subscriptions, it is reassuring to see the government reiterate in the consultation response its views on the importance of the ongoing vitality of the charity sector, and access to “the nation’s culture, landscapes, collections, and historical places.”
If you have any questions about the new rules please contact Paul Hilder, Matthew Short or Katrina Anderson.
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