New guidance on the Digital Markets Competition and Consumers Act

The Department of Business and Trade (DBT) has published its guidance to help charities and businesses comply with the Digital Markets, Competition and Consumers Act 2024 (DMCCA), ahead of the law coming into force in January 2027. This is welcome news for many charities. Since the law was first introduced in parliament in 2023, we have been working closely with affected members to make sure their concerns about how this would affect their income were heard. This final piece of guidance resolves many of the outstanding challenges we have raised, both in the initial consultation, as well as through engaging directly with parliamentarians and the civil service.  

Which charitable memberships fall into scope of the DMCCA? 

One of the most pressing questions members raised is whether charitable subscriptions constitute a contract, and therefore if the law should apply to them. There is no simple answer to this. The DBT has clarified that the law applies when there is a contractual obligation for the charity to supply goods, services or digital content, and when the consumer has a contractual obligation to pay for them. As such, they confirm that many regular donation products, such as 'friends' schemes where supporters only hear about updates related to charitable activities are unlikely to fall into scope.  

On top of this, there is a charity-specific exemption for organisation's who offer donors the opportunity to view property preserved, maintained, kept or created by the charity, or performances and films produced or hosted by the charity. This was introduced in response to our concerns that many charities who offer visitor experiences were at risk of seeing their memberships being misused. Under the DMCCA's cancellation rights, someone would have been able to purchase a charity membership, take advantage of unlimited benefits, then cancel in the first two weeks in exchange for a refund. Not only would this have put charities' income at risk, it would have also disadvantaged people who choose to be part of such memberships because they care deeply about the charities' mission. We are therefore pleased to see that this amendment has been introduced so that charities and their supporters can continue to benefit from this vital income stream.  

For many charities who offer subscriptions or memberships, the requirements for exemption and whether the Act applies to them may seem confusing. We will therefore be producing further content with our legal partners to help charities identify whether they are in scope of the Act.  

Can charities still claim Gift-Aid on eligible members? 

One of the sector's biggest concerns with the DMCCA is that it would inadvertently prevent charities from claiming Gift-Aid on donations that would otherwise be eligible. This was due to a clash with existing legislation that stated that Gift-Aid cannot be claimed on donations made where there was a condition of repayment. Following our feedback and advice on the issue, HMRC has now amended their Gift-Aid guidance to confirm that when refunds for memberships schemes and contracts are issued due to consumer protection law, the donation can still qualify for Gift Aid.  

For now, this is HMRC's interim position, however, we will continue to engage with them until a permanent solution is found.  

Will the DMCCA apply to donors who signed up before January 2027? 

The guidance confirms that the new rules apply to subscription entered into on or after 1 January 2027. This will come as welcome news for many charities who to date have been communicating with supporters exclusively by post, many of whom were concerned that the additional reminder notices would come at a financial and environmental cost.  

What are the Chartered Institutes' next steps? 

Overall, we are pleased to see this guidance has answered many of our most pressing questions and that charitable income will be protected. However, we appreciate there are still some matters that need to be resolved. We therefore plan to:  

If you have any questions about the DMCCA and how it may impact your organisation, please email policy@ciof.org.uk