The UK government has published its response to its consultation on the new consumer subscription contracts regime introduced by the Digital Markets, Competition and Consumers Act 2024 (DMCCA). While the DMCCA establishes the overall framework for the new regime, it leaves a number of important details to be addressed through secondary legislation. One point of particular interest for charities and cultural organisations is the government’s decision to exclude certain charitable, cultural and heritage memberships from the scope of the new regime.
Background: the new subscription contracts regime
The DMCCA introduces a new consumer protection regime for subscription contracts, aimed at tackling so called “subscription traps”. In broad terms, the regime will require traders to:
- provide clear pre contract information;
- give regular reminder notices before subscriptions automatically renew;
- ensure exiting contracts is straightforward for consumers; and
- allow consumers to cancel during new statutory cooling off periods, including after free trials or long term contracts renew.
For a more detailed summary of the subscription contract regime, please see our previous blog here. The regime will be implemented through secondary legislation and guidance. The government has confirmed that the rules are now expected to come into force in spring 2027.
Consultation concerns around charitable memberships
During the consultation, a number of respondents raised concerns about how the new cooling off and refund rules would apply to charitable memberships. Many respondents were worried that the new regime could create loopholes through which consumers could visit multiple sites, or exhibitions, before cancelling within the cooling-off period and getting almost all of their membership fee back.
Concerns were also raised about the interaction between the new rules and Gift Aid. Under the existing tax rules, Gift Aid cannot generally be claimed on donations that are subject to a right of refund. Respondents warned that applying mandatory refund rights to charity memberships could:
- prevent charities from claiming Gift Aid on membership fees;
- create uncertainty around charitable income; and
- impose administrative and financial burdens that would disproportionately affect the sector.
Scope of the exemption
In its response, the government has confirmed that certain types of charitable, cultural and heritage memberships will be excluded from the new subscription contracts regime. The government has stated a contract will be exempt if the contract:
- is between a charity and a consumer; and
- allows the consumer as a benefit of that membership to attend performances, see collections, or visit places (such as museums, galleries, historic properties, landscapes, wildlife, or performing arts); and
- such performances, events, and/or places are related to the charitable purpose of the charity.
While this provides a high-level overview, charitable and heritage organisations will need to pay close attention to the secondary legislation (and an associated guidance) to understand the scope of the exemption and mechanics.
For example, organisations will need to understand if there are any restrictions on the type of charitable organisations that may qualify, or how mixed offering subscriptions (i.e. subscriptions that provide access to both in-scope and out-of-scope activities) are dealt with. The detailed scope will be set out in secondary legislation,
The government has also updated the Gift Aid guidance to clarify that compliance with consumer protection law does not prohibit a Gift Aid claim from being made.
Next steps
While waiting on secondary legislation on subscription contracts to be published, charities should be proactive in ensuring they are up to speed on the general restrictions on unfair commercial practices under the DMCCA which came into force in April 2025 and apply to all businesses (including charities).
More information
You can access the Government’s response to the consultation on the UK Government website.
You can also read our general update on the Government’s response to the consultation.
Brodies is working with many clients to prepare for the new rules coming into force. For more information on the DMCCA and how your charitable, heritage or cultural organisation can comply with the new consumer protection laws generally, please contact Martin Sloan or your usual Brodies contact.
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