New rules, which are expected to come into force from spring 2027, will make it easier for people to avoid costly subscription traps.
The rules will mean:
- Clear, simple information to be provided before any subscription is signed up for.
- Reminders before free or discounted trials end, or before annual (or longer) contracts automatically renew.
- Cancellations will be made straightforward, including online exits for online sign-ups.
- A new 14-day cooling-off period, after a free or discounted trial ends, or when an annual (or longer) contract renews.
The government has confirmed that initial cooling-off rights and refunds will be broadly consistent with existing Consumer Contract Regulations. This includes retaining a waiver for digital content.
For the cooling-off refund period for renewals, consumers will be able to receive a full or proportionate refund if they decide to cancel. Proportionate refunds will allow businesses to be compensated for the proportion of contract services or digital content that has been supplied.
Certain memberships of charitable, cultural and heritage organisations will be excluded from the new rules.
Businesses that receive revenue from subscriptions will want to keep an eye on these regulations as they develop over the next year.
“Owners of dodgy shops that are evading tax: we are coming for you,” said Dan Tomlinson, Exchequer Secretary to the Treasury, as he announced that HMRC will make 30,000 high-street ‘interventions’ in the coming year as part of an initiative to tackle tax fraud and illegal activity.
The announcement of mandatory payrolling for Benefits In Kind was originally expected to start in April 2027, but following industry pressure, it will now be introduced in two phases.