Legal changes to subscriptions

Many amateur dramatic groups are registered charities and rely on membership subscriptions as donations to fund productions, venues, rights, costumes and community activity. These subscriptions often attract gift aid, forming a vital part of annual income.

Proposed consumer legislation risks unintentionally undermining this funding model.

What Is Proposed to Change

The Digital Markets, Competition and Consumers Act 2024 (DMCCA) includes proposed provisions that would introduce:

• A 14-day cooling-off period for subscriptions

• A requirement that subscriptions be refundable

These proposals were designed for commercial subscriptions, but could apply to charity memberships unless exemptions are confirmed.

The Gift Aid Risk

• Gift aid applies only to voluntary donations

• A refundable payment may not legally qualify as a donation

• This creates a potential conflict between consumer law and tax law

Although HMRC guidance currently allows gift aid to continue, guidance does not override legislation, leaving trustees exposed to uncertainty if the proposals are implemented without amendment.

Why Amateur Theatre Is Especially Vulnerable

• Small budgets and limited reserves

• Heavy reliance on predictable membership income

• Volunteer trustees with limited access to legal advice

• No commercial income to offset losses

For some, even small losses of gift aid could significantly affect the finances of amateur dramatic companies.

What Parliament Has Said

MPs from all parties have:

• Recognised the risk to small, community arts charities

• Called for urgent legal clarity

• Asked Government to treat charity memberships as expressions of support, not consumer purchases

• Pressed for charitable memberships to be exempted from cooling-off rules

Current Government Position

• Interim HMRC guidance allows gift aid claims to continue

• Government states it does not intend to change gift aid eligibility

• No confirmed timetable for legislative certainty

• Uncertainty is likely to persist into 2026 - 2027 if proposals are not clarified

What Organisations Are Asking For

• A clear exemption for charitable memberships

• Protection of gift aid on subscriptions

• Urgent legislative action, not guidance alone

What Groups Should Do Now

• Follow current HMRC guidance

• Keep clear gift aid records

• Avoid changing membership terms without advice

• Stay informed via NODA and/or Government announcements

Click here to download template to your local MP

Click here to download tempate to the Department for Business and Trade

 

Trustee FAQs

Q1. Does gift aid on memberships still apply?
Yes, for now. HMRC guidance currently allows charities to continue claiming gift aid on eligible memberships. However, the underlying legislation is not yet settled, which is why this issue matters.

Q2. Why is the DMCCA a problem for charities?
As currently proposed, it treats memberships like commercial subscriptions, requiring refunds and cooling-off periods that may conflict with gift aid rules.

Q3. Are we doing anything wrong by claiming gift aid?
No—if you follow current HMRC guidance. But trustees face uncertainty because guidance does not override legislation.

Q4. Do we need to change our membership terms now?
No immediate change is recommended without specialist advice. Premature changes could increase risk.

Q5. Are small charities really affected?
Yes. Small amateur theatre groups are most affected because they rely heavily on memberships and lack legal resources.

Q6. What is being done to fix this?
MPs from all parties have raised concerns. Government has acknowledged the issue but has not yet confirmed a legislative resolution.

Q7. What can trustees do now?

• Keep good records and gift aid declarations

• Follow government guidance

• Avoid unilateral changes

• Support lobbying efforts

Q8. What is the preferred solution?
A clear legal exemption for charitable memberships, recognising them as support for a mission, not consumer transactions.