Whilst there is no upper limit to the amount an individual, a trade union, or a corporation can donate to British political parties, checks must be undertaken to ensure that the donor is ‘permissible’.

In its policy paper announcing a new elections bill, the Labour government committed to bringing in further know-your-donor checks in order to strengthen “the safeguards against impermissible donations” and to “modernise how political parties and other recipients of political donations undertake checks on the donations they receive”.

The Representation of the People Bill had its first reading on 12 February 2026 and its second reading on 2 March 2026. Clause 58 outlines the rules around the enhanced ‘risk assessments’ that will have to be conducted on donations over certain limits.

What are permissible donors and what checks must be done?

Donations to political parties are only legally considered donations when they are over £500. Donations to parties under £500 do not fall under the scope of PPERA so do not need to be reported or recorded.

However, Electoral Commission guidance states that parties “must be alert to situations where it appears a donor is attempting to evade PPERA” as it is an offence for the donor to do knowingly do so. The Commission uses the example of multiple donations of £400 from the same source in similar circumstances as one in which parties should a) be live to and b) to contact them for advice if occurs.

On receipt of a donation in excess of £500, guidance from the Electoral Commission states the party must take “all reasonable steps” to ensure they know the true identity of the donor, and to check the donation comes from a permissible source.

The Electoral Commission has a detailed list of ‘permissible’ sources of donations available on their website. It includes:

  • individuals on a UK-electoral register, including overseas electors
  • a UK-registered company which is incorporated in the UK and carries on business in the UK
  • UK-registered trade unions
  • UK-registered building societies

For more details see House of Commons Library Research Briefing, Political financing: Donations, loans and state funding.

Political parties have thirty days to conduct permissibility checks and are encouraged by the Electoral Commission to keep a record of all permissibility checks conducted. If an impermissible donation is kept for longer than 30 days, it is deemed to have been accepted and is considered a breach of electoral law.

Details regarding how to return a donation are held on the Electoral Commission’s website.

Why have further reforms been recommended?

In a 2018 report, Digital campaigning – increasing transparency for voters, the Electoral Commission suggested that “some of the tools that businesses use for risk assessment and due diligence on customers could also be considered as a part of the rules for campaigners at elections”.

This was explored further in the Committee on Standards in Public Life’s (CSPL) 2021 review into the regulation of election finance. The CSPL pointed to the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Paper) Regulations 2017 (hereafter the Money Laundering Act 2017) as a possible model for how enhanced know-your-donor checks might work for political parties.

The CSPL also looked to the charity sector, where trustees are required to take “reasonable and appropriate steps” when either a) large sums of money are donated and/or b) a donation gives rise to a significant risk.

Reporting on evidence they had received from political parties and campaigners, the CSPL said that the Conservatives thought the current regulations were sufficient, but that Labour and the Liberal Democrats saw merit in exploring “anti-money laundering style regulations but it would be important to think about how such a process would work and the administrative workload that would be involved”.

The CSPL also suggested that some campaigners had outlined that given most donations are small, that it was important requirements were proportionate based on the nature of the risk. Therefore, enhanced checks should only apply above a certain threshold.

They took oral evidence from the Electoral Commission who suggested that the amount of money was not the only risk factor that needed to be considered. They were also “mindful of overburdening small parties and would like parties to be required to develop a risk-based policy based on their own situation”. This, in practice, would mean larger parties were treated differently to smaller ones.

Ultimately, the CSPL recommended that:

  1. The Political Parties, Referendums and Elections Act 2000 (PPERA) should be updated to require parties and non-party campaigners to have appropriate procedures in place to determine the true source of donations.
  2. That this should encompass a risk-based policy for managing donations, proportionate to the level of risk that they are exposed to.
  3. PPERA should be updated to require that political parties include a statement of risk management in their annual accounts.
  4. That the Electoral Commission produce detailed guidance on how to develop a proportionate risk-based policy.
  5. PPERA should be updated to require all donations over £500 are donated only through the banking system (pointing to Canada, France and the USA where this is the case).

What is in the Representation of the People Bill?

Section 58 of the Representation of the People Bill covers the enhanced know-your-donor requirements. It states that that donations received by a registered political party which exceed £11,180 (or aggregate to over £11,180 in a calendar year) must, within a 30 day grace period, have a risk assessment undertaken in relation to them.

The risk assessment must show that the party has conducted due diligence that the donation has not been made by a person other than a permissible donor. They must also show that they have taken into account the following risk factors:

  1. The type of person from whom the donation is received
  2. That person’s prior donation history
  3. The type of donation
  4. The amount
  5. Other risk factors the party considers to be relevant

These factors can be amended by the Secretary of State after either a) recommendation from the Electoral Commission or b) after consultation with the Electoral Commission. Political parties are also required to retain a record of each risk assessment undertaken and the information it used to conduct said risk assessment for at least six years.

The Representation of the People Bill also makes provision that the Electoral Commission must prepare guidance on how to conduct a risk assessment. This must include:

  1. How the person conducting the risk assessment should take risk factors into account
  2. The circumstances that might lead to a certain type or level of risk
  3. How the risk might be reduced
  4. Who should prepare the assessment and the procedure to be followed
  5. The kinds of checks that may be carried out for the purposes of the risk assessment

In drafting the guidance, the Electoral Commission must consult registered parties alongside other persons or entities they consider appropriate. This guidance is then submitted to the Secretary of State for approval. The Secretary of State can then either approve or modify the guidance, before it is laid before each House of Parliament. If modifications have been made a statement of justification must be laid alongside the guidance. Both Houses have a 40-day period under which to approve the draft. 

What has the response been?

During the second reading debate Steve Reed, Secretary of State for Housing, Communities and Local Government, said that the “know your donor principle” was “a key part of our changes”. However, he also suggested that as “the independent Rycroft review concludes we will consider its findings, and we expect to introduce amendments as the Bill progresses”.

Six Members (Mike Martin, Justin Madders, James MacCleary, Rushnara Ali, Zoe Franklin, Matt Western) directly referenced the know-your-donor reforms in their interventions in the second reading debate, all of whom welcomed the reforms.

The Electoral Commission published a detailed media briefing following the first reading of the Representation of the People Bill. They said that these checks “would give parties and campaigners greater confidence when deciding whether to accept donations”.

However, they also suggested a number of things to consider in enacting enhanced know-your-donor risk assessments:

  • That the location of the donor (defined as where in the world they are based) should be a risk factor
  • That the regime should be proportionate and workable such that there was not too much of an administrative burden on the donee
  • Thresholds at which risk assessments are required should be changed so that the regime is sensitive to the varying levels of risk faced by different donees
  • That the Government should consult with the regulated community over which factors should be included in a risk assessment

The campaign organisation Spotlight on Corruption, on 13 February 2026, released a briefing on the Representation of the People Bill which welcomed the know-your-donor requirements. However, they expressed concern that the guidance provided by the Electoral Commission could be modified by the Secretary of State before being laid before Parliament because it “undermines the independence of the Electoral Commission”. 

The Rycroft review was published on 25 March 2026. Rycroft said that the reforms contained in the Representation of the People Bill “will help to ensure that parties act in the public interest when they are offered large donations”. Nevertheless, concern was expressed that the rules “are not as rigorous as the customer due diligence checks required under anti-money laundering legislation”.

Rycroft ultimately recommended that the Representation of the People Bill be amended to more closely mirror anti-money laundering regulations. This would include requiring parties to conduct enhanced know-your-donor checks on donations that meet certain risk factors (such as the size of the donation and the location from which it was received).

The government has not yet responded to the Rycroft review in full though has said it intends to.

Declaration

Dr Sam Power is Parliamentary Academic Fellow at in the Parliament and Constitution Centre in the House of Commons Library. In his capacity as an independent academic, he acted as an expert advisor to the Committee on Standards in Public Life’s Regulating Election Finance review. He also given evidence to both the Joint Committee on the National Security Strategy and the Public Bill Committee for the Representation of the People Bill on matters related to political financing.

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