UK government plans tighter residency rules for political donors

Reform UK received two £36m donations from crypto-billionaires living abroad

The UK government has announced plans to tighten residency rules for political donors, proposing a £100,000 cap on donations from British voters living overseas that would apply retroactively to 25 March and a minimum 12-month UK residency requirement for major donors. The proposals follow a political row over Reform UK’s receipt of two £36m donations — totaling £72m — from British crypto-billionaires Ben Delo and Christopher Harborne, both of whom had recently lived abroad. Speaking during Lords debate on the Representation of the People Bill, Communities Minister Baroness Taylor of Stevenage said the government was “considering how we will strengthen the residency requirements.”

Reform leader Nigel Farage said the donations from Delo and Harborne are “100% compliant with the law today” but acknowledged he could not confirm they would be permissible under the proposed rule changes. “If the government was allowed to do this, you know what would happen? There would be a response the other way,” Farage told the BBC, arguing that retrospective action against large donors would prompt reciprocal moves against trade union funding and ultimately lead to taxpayer-funded political parties. The two £36m donations came in two days and now share the record for the largest ever donation given to a UK political party.

Under the current rules, foreign donations to UK political parties are illegal, but British voters living abroad can give unlimited amounts. There are also currently no restrictions on the amount of money UK-based donors can give to political parties. The government’s amendments to the Representation of the People Bill — approved by MPs and now under scrutiny in the House of Lords — would introduce a £100,000 annual cap on donations from British voters overseas, backdated to 25 March, alongside a residency requirement of at least 12 months in the UK. Baroness Taylor said the changes would operate “in addition to introducing a robust regime that ensures that donors contributing above the £100,000 annual cap must demonstrate a genuine and ongoing connection” to the UK.

Tax is one area that already has residency requirements. The criteria includes someone being declared resident for tax purposes if they have lived in the UK for at least 183 days in the tax year. The 183-day framework is one existing residency benchmark. It is not currently clear exactly when Delo and Harborne returned to the UK.

Business Secretary Jonathan Reynolds rejected suggestions the policy was aimed at Reform specifically, telling BBC Radio 4’s Today programme that policy on donations is “never about one political party or one particular set of issues.” Reynolds added: “Fundamentally we need to make sure that people who want to influence British politics, who want a say in British politics have a stake in Britain. That should apply to everyone and will apply to everyone, so I wouldn’t make it about any particular donations or anything that’s been in the public domain.”

Liberal Democrat Cabinet Office spokeswoman Lisa Smart accused the government of “playing whack-a-mole,” arguing that Labour’s residency requirements “aren’t good enough.” She called for “a universal donation cap to stop Trump’s America becoming Farage’s Britain.” Unite, the country’s second-largest trade union, separately called for a cap of between £500,000 and £1m on individual donations, a threshold that would not apply to union contributions. Other smaller unions favour a cap across the board but some bigger unions are wary in case this would threaten donations to Labour.

Trade union leaders agreed on a joint statement at the Trades Union Congress in Brighton on Tuesday, calling on the government to “protect our democracy from being captured by the super-rich” and to “clean up our politics.” The statement argued that trade union funding is “the cleanest money in politics” and “heavily regulated,” though it stopped short of endorsing a cap on individual donations. Unite general secretary Sharon Graham said the comparison between billionaire political donations and union contributions was “apples and pears.” “Individual donations from very, very wealthy people, from billionaires, the Americanisation of our democracy is very, very different from everyday people, workers putting 10p-a-week into a political fund,” she told Today. “If there’s an ick feeling, a yucky feeling about something then it’s probably wrong. I think most people will think two crypto billionaires giving £72m to Reform in two days is a problem for British politics and if it’s wrong then deal with it.”

Since 2020, Labour has received almost £43m from trade unions, who raise money through individual workers’ membership fees. Since the 2024 general election, the Conservative Party has raised £37m, Reform UK has raised £35m before the Delo and Harborne contributions, Labour had raised £21m, the Liberal Democrats £17m and the Green Party £1.9m. Both men had already donated millions of pounds to Reform ahead of the announcement of their latest contributions. The government has previously said it was “determined to tackle” the issue of “mega-donors” and has established a new taskforce to do so.