MANCHESTER, England (CN) – The British government announced Monday it will tighten rules on political donations to curb foreign influence in elections, unveiling reforms aimed at closing loopholes around overseas donors, as right-wing UK Reform leader Nigel Farage faces fresh allegations that he failed to declare support from a convicted fraudster.
The measures, which will be introduced as changes in Representation of the People’s Billit would impose tougher limits on large donations from people who have recently moved to Britain, tighten controls on corporate donations and require parliamentary candidates to disclose more pre-election financial support.
The announcement comes as Farage, one of Britain’s best-known populist, anti-immigration politicians, faces a possible second parliamentary standards investigation into financial support said to have been provided by longtime associate George Cottrell, a cryptocurrency entrepreneur who pleaded guilty to television fraud in the United States in 2017.
Farage is already waiting for the result a special inquiry by the Parliamentary Commissioner for Standardsthe independent watchdog that investigates lawmakers’ compliance with House of Commons rules.
The inquiry is looking into whether he should have declared a reported 5 million pound ($6.7 million) gift from reform donor Christopher Harborne before entering Parliament in 2024.
Coercion of political donations
The timing lends political significance to the government’s reforms, which ministers say are designed to protect British democracy from foreign influence, but also coincides with increased scrutiny of Reform’s fundraising and financial disclosures.
Housing and Communities Secretary Steve Reed said the Government was acting to ensure “British democracy is not for sale”.
“These tough new rules will shut down dodgy funds, stop foreign money from influencing our elections, and keep our democracy strong,” Reed said.
Under the proposals, people returning to the UK after living abroad would be banned for at least a year from making political donations above the government’s previously announced limit of £100,000.
Ministers said the change would prevent donors from circumventing the rules simply by reestablishing residence shortly before making a contribution.
Companies will also face stricter suitability tests.
Rather than being eligible to donate based on income, businesses will need to demonstrate sufficient after-tax profits over the previous five years. Ministers said the change would ensure donations come from genuine UK-related businesses with legitimate commercial activity.
The reforms also require parliamentary candidates to declare campaign funds received before officially becoming candidates from legitimate sources.
Donations exceeding £2,230 received before the regulated election period will also have to be declared, closing what ministers describe as a transparency loophole.
The package implements the remaining recommendations of the independent Rycroft Review into political finance and follows previous government proposals to limit large donations from overseas constituents and ban cryptocurrency donations.
The Void of Musk
The reforms also followed months of political debate over reports that Elon Musk had entered into negotiations with Farage over a possible multimillion-dollar donation to Reform starting in late 2024.
Because Musk is an American citizen, British electoral law prohibits him from making personal political donations. But election law experts said he could potentially have distributed money through a U.K.-registered subsidiary of X Corp., exposing what critics called “Musk’s loophole.”
This concern became the catalyst for Labour’s drafting of the Representation of the People Bill.
Democracy Minister Samantha Dixon said political finance rules must “keep pace with new and evolving threats”.
“These reforms will close loopholes that can be exploited by those seeking to influence UK politics through foreign money, by strengthening transparency around campaign finance and company donations,” she said.
Chief Secretary to the Treasury Darren Jones said foreign governments and online influence campaigns had sought to exploit Britain’s democratic system.
“If you want to donate to our politics, you have to have legitimate and long roots in our country,” he said.
Farage faces further scrutiny
The announcement coincided with reports from The Sunday Times which alleged that Farage failed to declare extensive help from Cottrell in the year before he entered Parliament.
Cottrell, 32, was arrested and charged with 21 counts of money laundering in US federal court in 2016. He later pleaded guilty to one count of wire fraud.
As part of a plea deal, he provided information to federal investigators, reducing his potential prison sentence from a maximum of 20 years to eight months.
He co-authored “How to Launder Money: A Guide for Law Enforcement, Prosecutors and Policymakers,” published in February 2026.
According to the newspaper, the support included security personnel, social media staff working on Farage’s online content and the use of a five-storey townhouse near Buckingham Palace rented by Cottrell.
Under House of Commons rules, legislators must declare registered financial interests and benefits received during the 12 months before their election.
Farage denied any wrongdoing.
“I have done no wrong, I have followed the rules and I am now considering legal action against the Sunday Times,” he said, adding that the allegations amounted to an “establishment hit job” against Reform.
When Farage entered Parliament, he revealed a £9,253 trip to Belgium funded by Cottrell and later recorded a £15,276 donation covering a domestic flight to the US.
No further support from Cottrell appears in the parliamentary record.
Center Liberal Democrat lawmaker Josh Babarinde has written to the Parliamentary Commissioner for Standards, demanding an investigation into the latest allegations.
“He has eaten a career to regain control, yet he won’t tell us, he won’t be honest with us about who controls him,” Babarinde said.
The parliamentary watchdog has not announced whether it will launch a formal investigation into Cottrell’s affairs.
Farage has maintained that he also complied with parliamentary rules in the Harborne special inquiry, arguing that the reported gift was made before he became a member of Parliament and was a personal, unconditional payment and not political support.
The Representation of the People Bill will return to the House of Commons next week, when ministers will debate political finance amendments.
Courthouse News reporter James Francis Whitehead is in England.
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