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Ministers will launch a crackdown on large political donations on Monday.
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Reform UK said gifts given to Nigel Farage were unconnected with his political activities and did not need to be disclosed.
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The government will announce measures to make political funding more transparent, including restrictions on donations from foreign-based benefactors.
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Reform UK leader Nigel Farage received benefits from crypto entrepreneur George Cottrell before the general election.
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Daniel Greenberg, the parliamentary standards commissioner, is investigating a £5m donation to Farage from crypto billionaire Christopher Harborne.
Steve Reed, Communities Secretary
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Communities Secretary Steve Reed said: "British democracy is not for sale. These tough new rules will shut down dodgy funding, stop foreign money influencing our elections and keep our democracy strong."
Darren Jones, Prime Minister’s Chief Secretary
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Prime Minister’s Chief Secretary Darren Jones said: "We’re cracking down on those trying to buy – and sell – our democracy and putting the British people first."
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The new rules will apply a £100,000 donations cap to anyone who moves to the UK from abroad for a year after they have done so.
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The government will introduce new checks to assess whether companies making political donations are legitimate by measuring their profit as well as their revenues.
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Ministers plan to introduce disclosure requirements for political candidates for the first time, applying to the period immediately before they became a candidate.
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Candidates will have to declare any donation above £2,230.
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Personal gifts will continue to be exempt from declaration requirements for candidates.
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MPs currently have to declare donations above £500, including for a year before they became an MP.
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Unsuccessful candidates are not required to follow the same donation declaration rules as MPs.
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The package will be introduced as amendments to the Representation of the People Bill later this month.
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The Sunday Times revealed that Nigel Farage accepted previously undisclosed benefits from George Cottrell in the period before he became an MP.
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George Cottrell spent time in a US jail for wire fraud.
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Benefits provided by George Cottrell to Nigel Farage included the donation of multiple staff members to run his social media team, security, and the use of a mansion near Buckingham Palace.
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Nigel Farage registered a £9,253 donation from George Cottrell to pay for a trip to Belgium in April 2024.
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Nigel Farage registered a £15,276 donation from George Cottrell for a US domestic flight provided in December 2024.
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In 2016, George Cottrell was charged with 21 offences for his alleged role in a money laundering scheme.
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George Cottrell pleaded guilty to wire fraud and spent time in prison in Arizona.
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George Cottrell is seeking a pardon from Donald Trump.
Richard Jenrick, Reform UK Official
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Richard Jenrick said: "Yes, absolutely." when asked whether George Cottrell paid for staff to run Nigel Farage’s social media presence in 2024.
Richard Jenrick, Reform UK Official
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Richard Jenrick said: "You’re allowed to accept a gift, support, whatever you want to call it, from a personal friend before you’re a member of parliament, if it’s in a purely personal capacity."
Richard Jenrick, Reform UK Official
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Richard Jenrick said: "When you’re a news presenter and you’ve just been on the jungle [in the TV programme I’m a Celebrity … Get Me Out of Here!], you do create social media content that’s nothing to do with his job as a member of parliament, because he wasn’t a member of parliament."
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Richard Jenrick acknowledged that Nigel Farage stayed in George Cottrell’s house "a couple of times" and accepted private security paid for by him.
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George Cottrell gave out business cards carrying Reform party branding and Nigel Farage’s email address.
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The Liberal Democrats have written to Daniel Greenberg urging him to investigate the donations from George Cottrell alongside the inquiry into the donation from Christopher Harborne.
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Daniel Greenberg is preparing to publish his findings on the Christopher Harborne donation in the next two weeks.
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Alistair Graham, the former chair of the independent Committee on Standards in Public Life, said Daniel Greenberg should investigate the two sets of allegations alongside each other.
Alistair Graham, Former Chair of the Committee on Standards in Public Life
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Alistair Graham told the Financial Times the allegations raised "serious doubts about the integrity of Nigel Farage as a senior politician".
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Labour MPs are pushing the government to introduce an outright cap on all political donations.
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Stella Creasy, the MP for Walthamstow, has promised to bring an amendment to the Representation of the People Bill to cap donations at £100,000.
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The government says a £100,000 cap on all donations would damage the political process.
Stella Creasy, MP for Walthamstow
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Stella Creasy said: "Every week brings more evidence – like the allegations regarding Cottrell – of the need to act to prevent the very notion any UK politician has a price tag."
Stella Creasy, MP for Walthamstow
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Stella Creasy said: "It is decimating public confidence in all of us."
Stella Creasy, MP for Walthamstow
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Stella Creasy said: "Capping donations at £100,000 from any single individual in a calendar year would put a stop to the idea any millionaire’s voice matters more than someone else’s and protect those who want to support causes they care about on all sides."
Stella Creasy, MP for Walthamstow
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Stella Creasy said: "Every party is chasing big donations – if we want to defend democracy, we need to step in now before it’s too late."
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