DMCC Act subscription contracts regime brought forward by the PM: What do businesses need to know?

On 10 August, as part of a roll out of 'everyday fixes' for cost of living pressures, the Prime Minister announced that the go-live date for the new DMCCA subscriptions regime is being brought forward to January 2027.

While the rhetoric around the announcement suggests that this is new policy, official communications from the Department for Business and Trade (DBT) confirm that there will be no changes to the requirements that are already set out in the DMCCA and the Government Response to the consultation published in April. The only change is to implementation timings.

Businesses had been expecting these rules to come into force in Spring 2027, following two earlier pushbacks to the implementation timetable.

While the Government's Response, finally published in April 2026, provides confirmation on the approach that will be taken on a number of key issues – such as the application of cancellation rights, and rules for refunds – a number of gaps still remain. The much-needed secondary legislation and guidance is still not published, leaving businesses without all of the information required to fully align their subscription products with the new rules.

Nevertheless, the Prime Minister's announcement is clear that businesses offering subscription products do not have time to wait – they need to do what they can with the information they have to prepare for implementation in January 2027.

As well as providing an overview of the core requirements of the new regime, this article identifies the further detail about the regime that we learned from the Government Response, including what we will see in secondary legislation and what will be covered in guidance, so that businesses can better understand what they need to do ahead of those documents being published.

Will there be a grace period for compliance with the new rules?

The Prime Minister's announcement is clear that the January 2027 date has been chosen to ensure new rules are in place for when consumers "start new subscriptions for the year ahead". This suggests that there is an expectation that businesses will be fully compliant with the new rules from January 2027. This appears to contradict the government's position in DBT's April 2026 consultation response, which promised a period of implementation for businesses to understand and prepare to operationalise the new regime. In light of DBT's confirmation that there will be no changes to the position set out in the DMCCA or Government Response, it is still hoped there will be an adjustment period after January. As formal guidance has yet to be published, the current window for implementation is already very narrow.

Nevertheless, due to the uncertainty around mandatory implementation deadlines, we strongly recommend that businesses do as much as they can to prepare before January.

What rules will be set out in the upcoming secondary legislation?

Notice requirements: durable medium and prominence

The government has helpfully provided some clarity about how the various information notices required under the regime must be given and in what form. In particular, the government will legislate that reminder notices, cooling-off notices and end-of-contract notices must each be:

• given in writing on a durable medium; and
• drafted so that their purpose is immediately apparent to the consumer.

End-of-contract notices must additionally ensure that the prescribed information is more prominent than any other information given at the same time.

The DMCCA defines "durable medium" as paper, email, or any other medium that allows information to be personally addressed to the consumer, enables it to be stored for future reference, and allows unchanged reproduction. Written letters, emails, SMS and WhatsApp messages are expected to qualify. However, the government has confirmed that in-app messages or notifications which appear briefly but cannot be retained and revisited will not meet the criteria.  

The government's additional proposal that prescribed information must be the first information the consumer sees in reminder notices and end-of-contract notices has been dropped.

Cancellation remedies for trader breaches

The DMCCA introduces a new regime of cancellation remedies where the trader has breached an implied term of the subscription contract, emphasising the importance of understanding the new DMCCA regime and ensuring readiness for the new rules when they come into effect.  

Where a consumer has become liable for a payment as a result of a breach of an implied term, they will be presumed entitled to a refund of all payments made from the point the breach was operational (to be defined in the legislation) until cancellation.

Traders will be able to rebut this presumption where they can establish that the consumer increased their financial loss by taking an unreasonable amount of time to cancel.

The legislation will include a specific list of acts or omissions which amount to breaches of an implied term and for which a consumer will not need to prove financial loss in order to access a refund. These are expected to include:

• Failing to give required key pre-contract information before the contract is entered.
• Failing to send the reminder notice, or omitting required information from it.
• Setting an unreasonable period in the pre-contract information for when reminder notices will be sent.

Notably, the government rejected submissions requesting a distinction between major and minor breaches, resulting in significant exposure for businesses. For breaches falling outside this list, consumers will need to demonstrate that the breach caused financial loss.  

Prohibited terms in subscription T&Cs

While the general principles on unfair terms under the Consumer Rights Act 2015 will continue to apply to subscription contracts, the DMCCA will go further with specific legislation preventing contractual terms in subscriptions which have the purpose or effect of making it disproportionately difficult for consumers to cancel auto-renewal. Legislation will also ensure traders cannot make consumers liable for payment before a rolling contract actually renews onto a new period. These new rules will be supported by guidance.

Proportionate refunds for digital content

While the existing approach under the CCRs enabling the waiver of cooling-off rights will be mirrored for initial cooling-off periods of digital content subscriptions, if a consumer cancels during a renewal cooling-off period, traders will now be required to calculate and issue a proportionate refund.

Where the subscription price is not linked to usage (for example, unlimited-access streaming services such as Netflix and Spotify), the government's expectation is that refunds will be calculated on the basis of average cost per day. The government rejected alternative consumption-based models designed to address 'binge-and-cancel' concerns, concluding that these would be "complex, depart from existing law, or create legal uncertainty."

Cooling-off rights for perishable and bespoke goods

The government has proposed a significant departure  from the CCRs rules for perishable and bespoke goods. Under the CCRs, such goods are exempt from the 14-day cancellation period, but the DMCCA regime will introduce new cooling off rights for subscriptions of perishable or bespoke goods.

These will be applied differently to other goods, with consumers only able to cancel and receive a full refund if they cancel before the goods are supplied. A consumer will still be able to cancel after supply, if still within the 14-day period, but the trader may reduce the refund by the value of those goods, including all associated delivery costs.

The 14-day period will also be calculated slightly differently. While for most categories of goods, this is calculated from the date the goods are delivered, for perishable and bespoke goods supplied under a subscription, the government will legislate that the initial cooling-off period will end 14 days after the contract is entered - reducing the window of financial exposure for the trader.

The government has confirmed that it will continue to apply the existing CCRs definition and scope for the categories of 'perishable' and 'bespoke' goods, but has committed to providing further clarity on these definitions in guidance,  as well as guidance on the meaning of "supplied" in respect of such perishable and bespoke goods. Additional clarity here is particularly important given that suppliers of such goods, that have not had to apply such rights before, will now be subject to additional obligations.

The government had proposed the introduction of a new 'dispatch date' concept for the purposes of applying the initial cooling off rights to contracts for perishable or bespoke goods, but this was subject to significant pushback due to the ambiguity of this term, and therefore the government has stuck with the concept of 'supply' which already exists under the CCRs.

Charitable membership carve-out

The government will legislate a new exemption from the subscription regime for charitable memberships — broadly covering contracts between a charity and a consumer that allow attendance at performances, visits to collections or places (such as museums, galleries, historical properties, landscapes, wildlife, and performing arts venues) connected with the charity's charitable purpose.

Rules consistent with the existing CCRs approach

There are a number of additional rules which will be legislated, but which broadly mirror the existing CCRs framework. These include rules relating to refunds for the supply of services, the timescales in which refunds must be given, the position for ancillary contracts when the main contract is cancelled, refund reductions for sealed goods etc.

What will appear in guidance?

The government has confirmed that a number of issues will be covered in guidance, rather than in legislation, and in doing so has deferred providing clarity on a number of issues until that guidance is published. Some of the key issues we are likely to see covered are set out below.  

• Mixed contracts. Guidance will address how the subscription regime applies where a single offering combines in-scope and out-of-scope products — for example, a bundle including both a telecoms service (excluded) and a TV streaming service (in scope). The government considers this guidance "desirable" given the complexity, but has not proposed a legislative solution.
• Proportionate refunds for services and digital content in practice. Guidance will address how proportionate refunds are calculated in practice. For fixed-fee unlimited-access contracts, the expectation is a pro-rated daily amount. Where a contract is usage-based (for example, a fixed monthly fee entitling a consumer to a set number of visits or downloads), the refund is expected to reflect actual usage during the cooling-off period.
• Handling, return and delivery costs. Guidance will clarify the implications of a consumer over-handling goods before return, and how refunds of delivery fees operate. This will be of particular relevance to businesses supplying physical goods under subscription arrangements.
• Easy exit and online cancellation. Guidance will confirm what constitutes a compliant online exit mechanism. The government's current position is that:
  
  • "Online exit" generally means exit via the same online medium used to sign up, though entry and exit mechanisms need not be identical. The government's examples include clearly labelled buttons on the website/app, or on the consumer's online account/membership page, as well as a webform on the website.
  • Providing a trader's email address is unlikely to suffice.
  • Cancelling a direct debit with a bank is not an online exit mechanism.
  • Consumers must be able to complete exit within a short period and without contacting the trader more than once.
  • Offers and requests for feedback during the exit process must not prevent quick and easy cancellation.
• Sector-specific applications. Further guidance will be provided for particular categories of goods or services, including goods supplied on hire. The government has, however, confirmed that for contracts for the hire of goods generally, it will ensure consistency with the CCRs in respect of the rules for cancellation rights and refunds.
• Pre-contract information. Guidance will address how pre-contract information should be presented. This will be particularly key for businesses given the potential implications of breaching these requirements, outlined above.
• Evidencing cooling-off notices. The burden of proof rests on the trader to show that a cooling-off notice was given. Guidance will address how traders can evidence this in a dispute.

What next?

Before the new regime goes live, secondary legislation, commencement orders and the full suite of guidance must all be in place. None of these actions have been completed yet.

This leaves the government with a lot to do before January 2027. As mentioned above, while we are hopeful that the government is still planning to provide businesses with a grace period after January 2027, this has not yet been specifically confirmed. Given the haste emphasised in the Prime Minister's announcement, this may be shorter than businesses had hoped, if granted at all.

Businesses should therefore do as much as they can now to prepare with the information we do have. This should include:

• Reviewing your contract terms for exit restrictions. Terms that make cancellation of auto-renewal disproportionately difficult are being targeted specifically in the new rules, so any particularly long notice periods or barriers to exiting should be scrutinised.
• Considering the available methods for the issuing of information notices. Now that we have confirmation that these must be issued on a durable medium, with the purpose immediately apparent, businesses can begin to narrow their options of how they'll issue such notices and begin building the necessary processes if these are not yet in place.
• Reviewing your online exit journey. It is important to assess the ease of the exit process and remove unnecessary steps, ensuring that consumers' only exit mechanisms are not using email addresses or direct debit cancellation. The government has signalled that clearly labelled buttons on websites and apps, or in 'account' or 'membership' pages, are likely to be the preference.
• Assessing your digital content refund obligations. If you provide digital content, you will need to consider how to introduce the new requirement to issue proportionate refunds for renewal cancellations. This may require a review of your pricing model and an update to your terms.
• Identifying your exposure on perishable and bespoke goods. If your subscription model involves goods in these categories, you can start to consider the changes that will need to be made to introduce the new cooling-off window and necessary refund mechanics.
• Ensure that your current subscriptions are compliant with existing consumer rules. Even though the new subscription regime is not yet in force, subscription contracts are still subject to general UK consumer law and are under increased scrutiny by the CMA. In recent months, the CMA has opened two investigations, into Adobe and Microsoft, in relation to their subscription practices. The Adobe case focuses on potentially unfair exit fees, and the Microsoft case focuses on a potentially misleading auto-renewal mechanism. You can read more about those cases here.

TLT's consumer regulation team regularly advises businesses on their subscription contract obligations. If you have questions about how the DMCCA regime will apply to your business, please get in touch.

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at August 2026.  For more information see our terms & conditions.