Who Is Allowed to Give Lots of Money to UK Parties?

The government wants to tighten the rules on who can give large sums to political parties. Ministers said the change would sit alongside a proposed £100,000 yearly cap on donations from British voters who live abroad BBC.

The rules have not changed yet. The plan relates to a live dispute about Reform UK. The party has received two donations totalling £72m from British crypto-billionaires Ben Delo and Christopher Harborne, both of whom had recently lived abroad.

Reform leader Nigel Farage said the donations are "100% compliant with the law today." Former Conservative leadership contender Robert Jenrick said the £72m gifts are "entirely in line with the law." Mr Delo and Mr Harborne have reportedly already returned to the UK Independent.

The cap and the residency test

At present, donations from foreign donors are illegal. But British citizens on the overseas electors register, the list of British voters living abroad, can still give unlimited amounts. Ministers said they want to end that position.

Think of the plan like a yearly spending limit. There would be a £100,000 yearly cap on donations and loans from overseas electors. The cap would be backdated to 25 March. The March announcement paired the cap with a proposed ban on crypto donations GOV.UK.

There would also be a residency rule. Ministers want a period of at least 12 months during which the £100,000 cap would still apply to a donor who moves back to the UK. Communities Minister Baroness Taylor of Stevenage said the government is considering stronger residency requirements, including "ensuring length of time spent in the UK aligns with broader government policy."

Lady Taylor said donors giving more than £100,000 a year must show a "genuine and ongoing connection to the UK." The exact legal test for that link has not been published. Whether a donation can be accepted is decided on the donor's status at the time it is accepted.

The parliamentary vehicle

MPs have approved changes to the Representation of the People Bill which back the government's donation plans. The Bill, which sets how elections are run, is now being examined in the House of Lords.

Ministers want a further change in the Lords that could test the legality of the £72m Reform donations Guardian. The government has not described the change as retrospective prosecution. Ministers said the cap would be backdated to 25 March, with donations from donors who are not allowed to give, received on or after the start date, to be returned within 30 days.

The start date and return rule will need careful checking. Residence is harder to prove than voter registration, especially for wealthy donors with more than one address, recent moves and complex tax affairs.

The wider finance package

The row sits inside a wider package on party funding. The government's July statement, titled 'Tough new rules to crackdown on foreign money in UK elections', includes tougher checks on company donations GOV.UK. Ministers have also proposed a ban on crypto donations to protect democracy.

The current reporting system would stay. Parties must report donations over £11,180, and local branches over £2,230. Donations of £500 or less do not need to be recorded or reported. Current rules will continue to apply to in-kind donations below £2,230, meaning practical help or goods rather than cash. Parties accepted over £93m in donations in 2023.

Labour's own funding is part of the argument at Westminster. Since 2020, Labour has received almost £43m from trade unions. Some backbench MPs want a limit for everyone. Alex Sobel MP's New Clause 69 would set a yearly cap of £1,000,000 on donations to registered parties.

The broader context here is a system based on who can give, not how much. Westminster has long controlled who is allowed to donate, with openness through lists and reports doing much of the work. A capped system with residency checks, plus company checks and a crypto ban, would move England, Scotland, Wales and Northern Ireland closer to a mixed system. The detail on valuing crypto, loans on cheap terms, and practical help will decide how watertight any ban is.

Looking to the next election, much turns on timing. Parties plan fundraising months in advance. Agents, the people legally in charge of campaigns, need to know which rulebook applies on polling day. If the Lords changes the residency test, MPs will have to look at it again. Until the new law starts, Mr Farage's legal point sits alongside ministers' policy aim. Both can be true. The law today allows what the government wants the law tomorrow to restrict.