Reform could be hit with £3m tax bill because of Farage’s £5m donation, tax expert claims
Reform England could face a £3 million tax bill due to Nigel Farage’s undeclared £5 million donation, a tax expert has claimed.
This follows reports that the Reform leader said he would need senior party officials to:one million a year“To cover lost earnings if he runs for parliament in the 2024 general elections,” he said, raising new questions about why this money was given to him.
Dan Neidle of Tax Policy Associates Ltd said Reform could be liable for a tax bill of up to £3bn if the reporting was accurate, adding that he would be “surprised now if HMRC did not open an investigation”.
However, the party denied the report it published. GuardHe says it’s “fake and completely false.”
The Reform UK leader received the sum from crypto billionaire Christopher Harborne in 2024 before announcing his decision to contest the general election. Mr Farage is currently being investigated by the Commons standards watchdog because he failed to declare this after becoming an MP.
Mr Farage gave different explanations for the £5m sum to be paid for his own safety and security, including for non-political purposes and later as “reward for 27 years of campaigning for Brexit”.
Parliament rules say any potentially “relevant interests” must be declared within 12 months before becoming an MP.
A series of new statements about cash, Guard On Wednesday it reported that Mr Farage had met with senior figures in March 2024 – shortly before Mr Harborne gave him the money – and said he would need “a million a year” to cover his lost earnings if he stood for parliament in the general election.
At the time, Mr Farage is said to have been under the impression that he would have to give up his presenting role on GB News.
Posting on social media following the reports, Mr Neidle said: “The key new element is discussions between Farage and senior Reform figures about compensation for Mr Farage returning as leader.
“As Mr Farage is already a director of Reform, this appears to be an arrangement to provide a reward linked to an office.
“If this is true and Christopher Harborne paid £5 million as part of this arrangement then HMRC will have a strong argument that the ‘hidden remuneration’ rules apply.
“The rules are terribly complex, but they were created to ensure that if someone received some kind of reward (from a third party, not their employer) it would still be taxable.”
He said any regulation “could be informal and need not be legally binding”, adding: “If the rules are implemented, Reform 2025 Ltd. [the company that operated the Reform Party at the time] He will be responsible for £5m of PAYE. So around £3 million. “Mr Farage would then have to pay compensation to the company.”
“I would be surprised if HMRC does not open an investigation. But unless Mr Farage tells us about it, we will never know whether there is an investigation or what the outcome is,” the tax expert said. But he emphasized that everything in his analysis was based on: Guard The article is correct, but not yet approved.
The fact that a party incurs a tax liability does not generally indicate any wrongdoing on the part of Reform, Farage or any other party involved.
Mr Farage has faced increasing scrutiny over his finances in recent weeks; The party leader resigned as an MP earlier this month to call by-elections in his constituency.
The Reform leader said he wanted to fight for “order against the people” in his seat of Essex after coming under scrutiny over undisclosed gifts and financial support before he was first elected.
The decision to trigger a by-election before the parliamentary investigation into his undeclared donations is completed means the investigation has now been paused and will continue if he is re-elected.
A Reform UK spokesperson said: Independent: “Guard The reporting is fraudulent and completely false.”
HMRC has been contacted for comment.
