Charlotte Sherman, Policy Manager, provides an update on the government's plan to implement the Digital Markets, Competition and Consumers Act 2024 (DMCCA).
The government has confirmed that charitable memberships that offer supporters the opportunity to attend performances, see collections or visit places linked to their charitable purpose will be exempt from the Digital Markets, Competition and Consumers Act 2024 (DMCCA).
On top of this, any charities who are not eligible for the exemption will still be able to claim Gift-Aid through HMRC’s revised guidance.
This announcement is a positive step towards resolving a long-standing issue for many charities who rely on membership schemes to fund their vital work. Since the DMCCA was first introduced in parliament in November 2023, charities big and small have raised concerns with us that the costs associated with implementing and complying with it posed both immediate and long-term risks to their income. As their representative body, we have taken every opportunity to highlight these issues with government through consultations, parliamentary briefings, and working groups.
We are pleased to see that the government has listened to us and our members’ concerns. The new regime could have potentially cost affected charities millions of pounds due to clashes with Gift Aid legislation, additional investment into administration, and loopholes within the cooling-off period that made memberships vulnerable to misuse.
Now, these funds will be going towards their intended use of funding programmes and services which communities up and down the country can benefit from.
The savings associated with the exemption will also come as good news to charitable supporters, many of whom want to see the maximum amount of their donation put towards funding the cause. Of course, these people will still benefit from the high levels of consumer protection as charities will remain subject to charity laws and regulation overseen by the Charity Commission and HMRC.
We recognise that there is still more work to be done to fully understand how this exemption will be enforced and who it applies to. As such, we will be continuing to have conversations with the Department of Business and Trade to make sure as many charities as possible can benefit from it. Should you have any questions, please email policy@ciof.org.uk.
“We welcome the government’s announcement that many cultural, heritage and conservation charitable membership subscriptions will be exempt from the scope of Digital Markets, Competition and Consumers Act (DMCCA) 2024. We have been calling for this on behalf of our members and the wider sector since the introduction of the original Bill in 2023 and have worked closely with government over the past 18 months to reach a solution which ensures charities are not negatively impacted by this.
Whilst we have always been clear that we support the DMCCA’s overall objective to strengthen consumer protection, we were concerned that the new regime did not account for the cross-cutting regulations and legislation that charities already adhere to. As such, many of the provisions introduced in the Act would have disproportionately impacted charities and forced affected organisations to divert funds away from their programmes and services. This would have not only hampered charities’ ability to provide public benefit, but also disadvantaged supporers who want to see their money go towards making a positive difference.
We await further detail from government on any guidance around this for the sector.”
