Following the new VAT rules which have recently come into effect regarding donated goods, another positive policy exemption for charities has now been introduced.
April, despite its wider international challenges, has brought some notable positive developments for charities. As mentioned in a previous article, the government recently introduced VAT relief on goods donated to charities. Now, the Government has announced that many charities will be excluded from certain requirements within the Digital Markets, Competition and Consumers Act 2024 (DMCCA), avoiding tangible losses in funding for the sector.
What has been announced?
The Government has said it will exclude certain charitable memberships from the new subscription rules under the DMCCA; they will exclude charities who allow: “consumers to attend performances, see collections, or visit places (for example, museums, galleries, historical properties, landscapes, wildlife, performing arts) which are related to their charitable purpose”; while also reiterating that Gift Aid claims will not be affected. Meaning many of the concerns raised by charities, particularly that cooling-off periods could be abused and Gift Aid may no longer be claimable, can now be eased.
It has been a long and winding road to the government’s current position on the DMCC Act, which was first introduced to Parliament in 2023…but all’s well that ends well! Charities, particularly the Chartered Institute of Fundraising (CIOF), have worked hard to ensure the government understood just how significantly these changes could have affected the sector.
The CIOF commented on the announcement:
“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 supporters who want to see their money go towards making a positive difference.”
You can read more on their website.
Despite the many challenges facing our sector, it is encouraging that policy progress continues to be made. As always, we will update when further details are released, and we welcome any input on the topic, so do reach out to us at policy@cfg.org.uk.