Response to the Rycroft Review into countering foreign financial influence and interference in UK politics

Overseas voters

Recommendation 1: There should be an annual cap on political donations from British voters living abroad.

We welcome the principle behind this recommendation. A cap on the amount overseas electors can donate will help address the two issues identified as risks in the Rycroft Review – the traceability of the sources of funds from overseas electors, and the perception of democratic fairness.

Since the publication of the report, the Government has announced it will implement an annual cap of £100,000 on donations from overseas electors. The Government has said it will amend the Bill, to allow for the cap to apply retrospectively from 25 March 2026 (subject to the Bill receiving Royal Assent).

There are practical challenges to the implementation and enforcement of this recommendation. These include how donees will be able to confidently and accurately identify the total donations an overseas donor has made in a year, the process for returning such donations if a donor breaches the annual cap and whether the value of the cap could be changed over time.

Following the Government's announcement, we have published advice for parties, candidates and campaigners on the proposed changes to the law. Our guidance can only reflect what is in legislation, and so will be updated to support the legislation coming into force.

Our advice sets out actions that the regulated community may wish to consider taking so that they are prepared for any future changes to the law. We are continuing to work to understand how this cap will be implemented and retrospectively applied, so that donors and donees can have certainty about their obligations and clarity about how the measure will be enforced once the legislation is in place.

Corporate donations

Recommendation 2: The corporate donation test in the Representation of the People Bill should be amended to one based on post-tax profits, rather than revenue, and no corporate donor should be able to donate more than their post-tax profits, averaged over the preceding two years, into UK politics in any given year.

We strongly support this recommendation.

We have significant concerns that the company donation clauses in the Bill fail to provide an effective check on the entry of money from foreign sources into the UK political system. The current approach in the Bill of using a company’s revenue to define the limit would mean that companies can still donate more money overall than they have made in the UK.

Using profit instead of revenue ensures voters can have the confidence that entities are only able to influence the political process in a way that is more directly tied to the value of money they have made in the UK, and more closely reflects their true financial capacity to donate to UK politics from that money. Using an average of profits from two years would help to smooth the impact of natural changes in a company’s level of profitability, while avoiding the risk that exceptional profit reported in a single year could also be used to set a limit for large donations in one or more subsequent years.

Additionally, the proposal in the Bill applies the limit separately to each recipient, so a company could donate an amount equal to their revenue to a party and then donate the same amount to each of the party’s (or multiple parties’) MPs, councillors and candidates. For the limit to be at all effective, it must apply to the total value of all of a company’s political donations in a calendar year, regardless of the number of recipients. This could be achieved through a donor declaration, with minimal administrative burden. We have no evidence that companies would struggle to track the donations they make in a year.

Cryptoassets

Recommendation 3: The Government should legislate in the Representation of the People Bill to introduce a moratorium on political donations made in cryptoassets, with a power to end the moratorium only once Parliament and the Electoral Commission are assured that relevant regulation is effective.

We welcome this recommendation. We have identified a number of increased risks associated with cryptoasset donations. These include the challenge of establishing the true identity of a donor, identifying the true source of funds through a cryptoassets transaction history and limits to transparency if cryptoassets are converted into fiat currency and then reported as ‘monetary’ political donations. These challenges have the potential to limit transparency for voters, restrict effective oversight and could undermine existing safeguards in the political finance system. Not addressing these challenges risks undermining already low levels of voter confidence and trust in the political finance system.

Since the publication of this report, the Government has announced its intention to introduce a moratorium on all cryptoasset donations, including donations worth less than £500. The Government has said it will amend the Bill, to allow for this moratorium to apply retrospectively from 25 March 2026 (subject to the Bill receiving Royal Assent).

Following the Government's announcement, we have published advice on the proposed changes to the law. It sets out actions that the regulated community may wish to consider taking so that they are prepared for any future changes to the law. We are continuing to work to understand how this moratorium will be implemented and retrospectively applied, so that donors and donees can have certainty about their obligations and clarity about how the measure will be enforced once the legislation is in place.

We agree with the recommendation that effective regulation should be a precondition for a decision to end the moratorium and we agree that the Bill should include a power to allow the moratorium to be ended, once it is determined that this relevant regulation is effective. Statutory guidance, produced by the Commission and approved by Parliament, would provide greater certainty about the steps donees should follow when handling cryptoasset donations, in line with political finance laws. It would also ensure those who are considering accepting cryptoassets can do so with confidence and assure voters that there is transparency over these types of donations. This guidance would be developed with input from stakeholders such as political parties and regulatory bodies like the Financial Conduct Authority (FCA).

Other conditions for ending the moratorium could include the introduction of further legislative changes to support the transparency of cryptoasset donations. For example, this could include requiring crypto exchanges to provide parties and us with identifying details of the cryptoasset donor. These additional changes could help both regulated entities and the regulator to identify the donor’s identity and the true source of funds.

We are already working to ensure our regulated community are prepared for the proposed changes to the law and stand ready to provide the necessary guidance to support them to manage the risks arising from cryptoasset donations.

Campaign donations and spending: transparency

Recommendation 4: Non-party campaigner and candidate campaign spending should come from permissible donors and reporting and transparency requirements should apply to these groups year-round. The definitions of ‘campaign spending’ should be revised to more comprehensively capture the campaigning activity of non-party campaigners and candidates.

We welcome efforts to improve the transparency of donations to non-party campaigners and candidates outside the current regulated periods. It is important voters have sufficient information about who is funding campaigns that aim to influence their vote.

We agree with the Rycroft Review that this is a complex area that requires significant time to develop evidence-based policy and careful consultation with candidates, parties and campaigners. We are committed to working with Government and the regulated community to do this, but this needs time. These changes should not be rushed through the Representation of the People Bill.

The Bill already includes significant and complex changes to regulation and enforcement of political finance. For example, we will take on responsibility for enforcing the wider candidate regime, including any political finance offences. This is a significant change for our stakeholders, who must be given the necessary time and support to understand and comply with this, before considering any further regulatory changes. Any further changes must account for the existing scale of change in the Bill and the need to implement these changes at pace. To support compliance and ensure that administrative burden is proportionate, regulated entities will need to have fair advance notice of new requirements placed on them.

We are ready to work closely with the Government, the regulated community and other stakeholders to consider this recommendation, over a longer period of time and to implement meaningful changes that are workable and proportionate.

Know your donor regime

Recommendation 5: The ‘Know your donor’ provisions in the Representation of the People Bill should be further developed to more closely mirror the customer due diligence provisions in the anti-money laundering regulations.

We welcome improvements to strengthen the ‘know your donor’ provisions in the Bill.

The Bill contains provisions to help the regulated community identify donations that have potentially come from impermissible sources. Under the proposed ‘know your donor’ (KYD) checks included in the Bill, donees will be required to carry out an assessment of the risk that donations or loans above a certain threshold (£11,180) ‘would be made by a person other than a permissible donor’. The results of this risk assessment will inform the steps a donee must take to verify the identity and permissibility of a donor, before accepting a donation.

Under the new laws in the Bill, it will be an offence to accept a donation or loan over £11,180 without carrying out a risk assessment. These changes will help to reduce the risk of foreign money entering the UK political system.

To support implementation of the measures in the Bill, we will produce statutory guidance on conducting a risk assessment. The circumstances surrounding donees and their donations vary extensively, and so guidance will be flexible and support the varying needs of our regulated community.

To strengthen the new laws, we recommend an addition to the proposed list of factors that donees must consider in a risk assessment, as part of the Bill. Similar to Rycroft’s suggestion of ‘location’, within the list of risk factors, we recommend that donees should be required to examine ‘the person’s connections to other countries and jurisdictions’ when a donation is handled. This should help donees to identify and respond accordingly to donations with a connection to a foreign source.

The Government should also consult the regulated community over which factors should be considered in the risk assessment. Their expertise and experience is essential to ensure the proposals are workable and do not deter participation.

Internal policies and procedures

Recommendation 6: The Electoral Commission should work with political parties and the Ethics and Integrity Commission to develop a non-statutory code of conduct to ensure that robust procedures are in place within parties to equip party officials better to deal with the threat of foreign financial interference.

We support the principle and intent of this recommendation to help parties to deal with the threat of foreign financial interference. However, we do not believe that a new non-statutory code of conduct is necessarily the right mechanism for this.

There are over 400 registered political parties of varying sizes, which will face different types and levels of risk. It will be essential to ensure that information about procedures to identify and deal with the threat of foreign financial interference is relevant, proportionate and accessible to all parties. It will also need to be updated to reflect the changing context and new evolving risks.

It will also be essential to ensure that technical security experts, such as MI5 and the National Cyber Security Centre (NCSC), are involved to develop relevant and effective information to support parties. We will work with these organisations and the Ethics and Integrity Commission to identify the most appropriate mechanisms for ensuring parties have access to the information they need.

Standardised reporting

Recommendation 7: The Electoral Commission should mandate political parties to submit their annual reports and accounts and campaign spending returns in a standardised format.

We strongly support this recommendation.

Mandated, standardised statements of accounts and campaign spending returns would provide much needed consistency and ensure a minimum level of detail in political parties' financial reporting. Consistency in reporting enables more meaningful comparisons to be made between political parties and across electoral cycles. This will help voters to make informed decisions, improve media scrutiny, and enable researchers to analyse trends to be able to better assess the effectiveness of the regulatory framework.

We already have the power - through regulations - to mandate the use of a standardised template for annual statement of accounts. However, existing wording on our power to mandate the use of party and candidate campaign expenditure returns is ambiguous.

The Bill clarifies that we can mandate the use of candidate election expenses forms, but a further amendment is required to extend this clarity to party campaign expenditure returns.

We currently have a power to require additional information in candidate spending returns and party donation reports, beyond what is set out in law. However, this power does not extend to party campaign expenditure returns, non-party campaigner spending returns, or referendum expenses returns. Granting us the power to require additional information across all returns, and mandating the use of our forms, would improve transparency and allow for more meaningful scrutiny across the regime.

We are currently developing a new Political Finance Online system, which will be designed to incorporate the requirements of the standardised forms. This will simplify the submission of returns for parties, candidates and other regulated entities, reducing the administrative burden.

We have long called for legislative changes to update the spending categories as current categories are too broad and fail to provide meaningful transparency in modern campaigning. There are also inconsistencies in spending categories across regulated entities. It is important that any updates to the categories increase transparency for voters over what money is spent while remaining proportionate and workable for the regulated community.

Information sharing

Recommendation 8: The Electoral Commission should coordinate with Government, the security services and the police to ensure that political parties receive regular updates on the threat landscape, so that they have a comprehensive and up-to-date picture of the risks around foreign financial interference.

We support this recommendation and note the work already taking place between ourselves and the Government to ensure parties have a comprehensive and up-to-date picture of the risks around foreign financial interference.

The protection of the democratic system is supported by close collaboration and regular information sharing between specialist agencies, such as MI5, the NCSC, and political parties. We coordinate within this framework, ensuring that political parties receive this information directly from the sources that are best placed to support them.

For example, in February 2026 we arranged a Parliamentary Parties Panel (PPP) meeting with the Security Minister, the MI5 Director General, and the NCSC CEO. This event provided a detailed security briefing on foreign interference for UK political parties.

The Joint Election Security and Preparedness Unit (JESP) also plays a key role in coordinating efforts to safeguard elections, particularly in the lead up to polling day when an ‘Election Cell’ is established to respond to any emerging issues.

The involvement of expert agencies to deliver threat updates is essential and we will continue to strengthen engagement between these expert agencies and political parties.

Investigatory and other powers of the Electoral Commission  

Recommendation 9: The information-sharing powers of the Electoral Commission should be extended, so that it can not only share information with other agencies, but also require information of them.

We strongly support this recommendation.

This power would establish a clear statutory gateway for us to share and receive relevant information with other agencies in a timely and effective manner. It would strengthen our ability to prevent, detect, and respond to impermissible funding and better protect the system from foreign interference.

Recommendation 10: The powers of the Electoral Commission should be extended to allow it to require information from any person or organisation who may hold relevant material that it reasonably requires for the purposes of carrying out its functions.

We strongly support this recommendation.

We have called for an extension of our information gathering powers to allow us to compel information, documents and explanations from any entity that we reasonably require for the purposes of carrying out our functions, outside of a formal investigation. This would include information from financial institutions and cryptocurrency platforms.

The Rycroft Review rightly identifies the importance of our ability to work in real time to act on suspicious activity and head off the possibility that offences might be committed. We agree that this should be taken forward in the Bill and are ready to work with the Government to ensure the effective extension of our powers to strengthen our regulatory levers and support the overall robustness of the system.

Investigation and prosecution of offences

Recommendation 11: The Government, as part of the forthcoming reform of police structures, should ensure the creation and resourcing of a centre of police excellence to pursue the investigation of complex criminal offences under electoral law involving foreign interference in UK politics.

We strongly support this recommendation. It is essential that the police have the expertise, resources and capacity to identify, investigate and enforce serious breaches of electoral law.

A strong multi-agency network already exists to address electoral fraud, and we have productive relationships with the police and relevant agencies, such as the National Crime Agency (NCA), to support this. We also work closely with the National Police Chiefs Council to support police officers in single point of contact (SPOC) roles.

Despite these established partnerships, the network can sometimes be fragmented. The proposed reforms to police structures in England and Wales provide the opportunity to reduce this friction and build on existing relationships to deliver a more secure system.

The recommendations on effective enforcement must not be considered in isolation. As such, we note the interdependencies with recommendation 12, concerning the burden of proof and sentencing limits, are necessary to ensure effectiveness of any police centre of excellence.

Expanding our ability to gather and share information, as set out in recommendations 9 and 10, is also critical to our ability to work effectively with other agencies to identify, prevent, and respond to the impermissible influence of foreign funding within our democratic system. It is important that we can do this in a timely manner, given the realities of the reporting cycles of parties and campaigners and the nature of elections.

Burden of proof and sentencing limits

Recommendation 12: PPERA should be amended to reduce the burden of proof for criminal offences to show that an offender might have ‘reasonable cause to suspect’ that they were committing a crime and the sentencing associated with each criminal offence under PPERA should be reviewed, to ensure it matches the seriousness of the offences.

We strongly support this recommendation to make a change to the standard of culpability for certain criminal offences under PPERA.

This is important to ensure that the most serious breaches of political finance laws, such as those involving impermissible foreign money, are effectively enforced. These breaches can only be addressed effectively where there are strong deterrents, appropriate sanctions, and realistic criminal elements.

The successful enforcement of criminal offences is also tied to our information sharing and gathering powers (recommendations 9 and 10). These powers will better enable us to identify serious breaches and refer relevant information to the police where a criminal offence is suspected, while generally supporting better collaboration with other agencies. As noted above, this recommendation is also intrinsically linked to the establishment of a centre of police excellence (recommendation 11).

It is important that this recommendation is prioritised as soon as possible and is developed through consultation with agencies such as the National Police Chiefs’ Council, the UK’s prosecuting authorities, the National Crime Agency and the Metropolitan Police Service, who hold the relevant criminal investigatory and prosecutorial experience.

Online political advertising

Recommendation 14: The Government should further tighten the regulation of online political advertising by banning foreign funded adverts outright, ensuring that imprints include who has paid for them and requiring influencers who promote paid-for political views to come under the imprint regime, and should consider adjusting the definition of material for which digital imprints are required to make it suitable for the type of campaigning we see today.

Social media has become an increasingly important tool for parties, candidates and campaigners to engage with voters. While these platforms can help reach diverse audiences, inform voters of policies and increase civic engagement, there is a need for legislation to keep pace with modern digital campaigning methods.

While we support the principle of banning foreign funded adverts outright, careful consideration should be given to any unintended consequences. For example, the existing £700 spending limit on ineligible campaigners has had significant consequences for legitimate domestic political actors including established registered political parties, but we have not seen direct evidence that it has deterred any foreign actors.

Influencers promoting paid-for political views are already required to include an imprint under the existing regime. Furthermore, statutory guidance makes it clear that ‘organic material published by or on behalf of a relevant entity must include an imprint, even if they have not paid for it to be published'. This would capture influencers who have not been paid by a political party to promote a political view.

We continue to recommend that requiring candidates to include their political party affiliation on their imprint would represent a simpler and more effective means of improving transparency across the imprint regime.

Proposals to create a single, nationwide social media advertising library would further promote transparency in online political advertising and improve scrutiny of political advertising across platforms. However, the burden on platforms must be considered and proportionate to be effective.

Lobbying

Recommendation 15: The Lobbying Act should be amended to remove the VAT exemption for all foreign based entities which would otherwise fall under the provisions of the Act.

We support this recommendation. Current rules allow lobbying entities which are registered in foreign countries but are operating in the UK to avoid registering with the UK lobbying Registrar. This is because there is an exemption for all non-VAT registered lobbying companies.

This recommendation would address this longstanding loophole, as identified by independent reviews including the Public Administration and Constitutional Affairs Committee’s post-legislative scrutiny report on the Lobbying Act 2014.

Parliamentary standards

Recommendation 16: Consideration should be given to broadening the scope of the Ethics and Integrity Commission’s review into lobbying, disclosure and access to government so that it also examines potential channels for foreign money to flow into the wider political eco-system.

We support the Ethics and Integrity Commission’s review into lobbying, disclosure and access to government and look forward to considering its conclusions.  We recognise that the existing political finance framework does not capture every aspect of foreign political influence and the outcomes of this review will support wider policy development.