In this blog Charlotte Sherman, Growing Giving Policy and Partnerships Manager, talks about the work we have been doing to make sure gift-aid income is not impacted by the current Digital Markets, Competition and Consumers Bill.
Some months ago, we were approached by a few members who were concerned that the Digital Markets, Competition and Consumers Bill, could stop charitable memberships from claiming gift-aid. Since then, we have been working with other sector bodies and charities to lobby the government and stop this.
The Bill was created by the Department for Business and Trade to tackle subscription traps, which are costing consumers £1.6 billion a year. It wants to do this by introducing a range of new requirements, including more pre-contract information, reminder notices, and a 14-day cooling-off period.
Although we agree with the Bill’s aim to improve consumers’ control over their subscriptions, some of the proposed requirements bring unintended consequences for certain charities, in particular the cooling-off. Under current consumer protection laws, this automatically implies a condition of repayment, but gift-aid cannot be claimed if there is a condition of repayment. If this is left unchecked, it could stop charities being able to claim gift-aid on memberships and cost the sector millions.
But given that the Bill did not set out to change the gift-aid regime, there is a strong argument for subscriptions that are eligible for gift-aid to be exempt from the Bill’s requirements.
Given the huge impact this could have on charities big and small, we teamed up with NCVO, the Charity Finance Group and a wide range of charities to propose a solution to parliamentarians and civil servants that would work for everyone. We agreed that the best solution would be for memberships eligible for gift-aid to be added to the Bill’s list of excluded contracts.
The second reading of the Bill saw many Lords bring up the issue, including Lord Holmes who we briefed with help from our corporate members Swiftaid, and the Minister recognised that this is a problem that needs to be solved, meaning we are now one crucial step closer to finding a solution. Since then, Lord Mendoza has also tabled an amendment which was supported by several backbenchers.
We will be writing a joint letter from the Chartered Institute, NCVO and Charity Finance Group reiterating our concerns and requesting a meeting so we can find a solution to this.
If you are concerned about the impact the Bill will have on your charity, please do get in touch with me by emailing robc@ciof.org.uk.
Charlotte Sherman, Growing Giving Policy and Partnerships Manager