New subscription contract regime: draft guidance reveals how the rules will work in practice

The UK government has published draft guidance and the draft Consumer Subscription Contracts (Cancellation and Information) Regulations 2026 relating to the new consumer subscription contract regime introduced by the Digital Markets, Competition and Consumers Act 2024 (DMCCA). The draft regulations supplement the subscription contract provisions contained in the DMCCA and provide further detail on how the regime is intended to operate in practice.

The reforms are intended to tackle so-called ‘subscription traps’ and make it easier for consumers to understand, manage and exit subscription arrangements. Whilst the core requirements were already included within the DMCCA, the draft guidance provides significant clarification on how the government expects businesses to comply with the new rules in practice.

The guidance will be particularly relevant to businesses operating recurring payment models, including digital platforms, software providers, membership schemes, subscription box services and other automatically renewing consumer contracts.

Greater certainty on implementation

Businesses now have much greater certainty on when the regime will take effect. Under the draft regulations and guidance, the subscription rules will apply to subscription contracts entered into on or after 1 January 2027.

With implementation now only a couple of months away, businesses should be reviewing any remaining compliance gaps and ensuring that their systems, processes and contractual documentation are ready for the new regime. For many businesses, compliance will require changes not only to terms and conditions, but also to online customer journeys, billing systems, reminder notice functionality and cancellation processes.

‘Easy cancellation’ means exactly that

The most notable aspect of the guidance is the level of detail provided on cancellation processes. In particular, sections 4.5.1 to 4.5.4 and FAQ 12.5 (’Exit arrangements’) provide detailed commentary on what the government considers to be a compliant cancellation mechanism.

Whilst the DMCCA already requires businesses to provide consumers with a straightforward means of cancelling a subscription, the guidance makes clear that the policy intention is for consumers to be able to leave a subscription as easily as they entered it. The government emphasises that consumers should generally not have to contact a trader more than once to cancel.

The guidance also suggests that compulsory feedback forms are unlikely to be compatible with the new regime and that simply directing consumers to an email address may not amount to a compliant online cancellation mechanism.

These examples provide some of the clearest guidance yet on what a compliant cancellation mechanism looks like and may require changes for businesses that rely on retention journeys, multiple cancellation steps or unnecessary barriers to cancellation.

Additional clarity on reminder notices

The guidance also provides much-needed clarification on reminder notices, an area which generated significant uncertainty following publication of the DMCCA. Sections 4.4.1 and 4.4.2 of the guidance contain detailed commentary on the frequency and timing of reminder notices.

A number of practical examples in relation to reminder notices are included covering:

• monthly rolling subscriptions

• annual subscriptions

• free trial arrangements

• subscriptions involving introductory discount periods.

The guidance provides greater clarity on when reminder notices should be issued before consumers move from an introductory offer to a higher-priced renewal period. For example, businesses offering discounted introductory subscriptions now have clearer guidance on when reminder notices must be sent before the higher renewal price takes effect. This will be especially relevant for businesses operating promotional pricing models or free trial structures.

Businesses should review whether their current systems can identify the relevant trigger dates and generate compliant reminders at the appropriate points in the subscription lifecycle.

Detailed guidance on cooling-off rights and refunds

The guidance also contains detailed commentary on how cooling-off rights and refund obligations are expected to operate in practice. Sections 6 and 7 of the guidance provide detailed examples covering:

• subscriptions involving goods, services and digital content

• the calculation of refunds following cancellation

• the treatment of mixed subscriptions

• circumstances in which consumers may remain liable for part of a subscription payment after cancelling.

For example, the guidance provides helpful clarification on how refunds should be calculated where a subscription includes a mixture of goods, services and digital content, and when consumers may still be required to pay for elements already supplied before cancellation.

This is perhaps the area where the guidance adds the greatest practical value. The additional detail is likely to be particularly helpful for businesses offering subscription boxes, digital memberships and hybrid products that combine multiple elements within a single subscription arrangement.

Clarification on excluded sectors

The guidance also provides additional clarity on which contracts fall outside the scope of the subscription contract regime. Chapter 3 of the guidance contains detailed commentary on a number of exclusions, including charitable memberships, utilities, financial products, medical prescriptions and products, telecommunications services and childcare services.

This will be particularly helpful for businesses seeking to determine whether the new subscription rules apply to their products or services in the first place.

Enforcement remains a key consideration

Businesses should also be mindful of the Competition and Markets Authority’s (CMA) enhanced enforcement powers under the DMCCA. Breaches may be enforced through the courts or directly by the CMA, increasing the regulatory risks associated with non-compliance. Compliance should therefore be viewed as more than a contractual drafting exercise and should extend to customer journeys, systems and operational processes.

Looking ahead

The draft guidance and regulations provide the clearest indication yet of how the subscription contract regime is expected to operate in practice. The overarching message is clear: subscription arrangements should be transparent, consumer-friendly and easy to leave, not merely easy to join.

Businesses offering subscription products or services should use the next couple of months to review their subscription terms, sign-up journeys, reminder notice processes, cancellation mechanisms and refund procedures to ensure they are well placed for compliance when the new regime comes into force.

Please note: the draft guidance and draft Consumer Subscription Contracts (Cancellation and Information) Regulations 2026 remain subject to parliamentary approval and may change before coming into force.

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