New rules may stop Elon Musk from making unlimited donations to Reform UK

Ministers are drawing up plans restricting foreign donors from giving unlimited funds to UK political parties, Sky News understands.

Currently, political parties can accept donations from any company registered in the UK - and foreign donors can and have used these companies to make indirect contributions.

The rules allow for British companies to be used in this way even if they don't make any money at all.

However, Sky News understands that officials are currently looking at restricting donations based on how much money a company makes - either using a profit or a share of revenue to calculate a potential cap for the amount each UK business can give.

The government says this is in line with its manifesto pledge to "protect democracy by strengthening the rules around donations to political parties".

Senior government sources have told Sky News these changes are partially about Elon Musk.

Officials are said to be anxious about the rumoured donation of $100m (about £80m) that Musk has suggested he would make to Reform UK.

The government's thinking is that the tech billionaire is likely to do this just before the next election, and they hope they can pass their Elections Bill - the legislation through which the donation loophole would be closed - through parliament before that happens.

The bill would enter parliament in the next session, but ministers have told MPs that they should expect an update to these plans within months.

Musk's donation would be an astronomical amount in the context of British politics.

The sum would trump all political donations that have been made to any political party this year - and would inevitably make a big impact on campaigning.

Elon Musk is not on the electoral register and the British arm of his company X - X.AI London Limited - has not yet made any money.

Under the proposed changes, this avenue of donating money to Reform UK would not be possible.

A government source said this is just one of the options on the table, adding that another change they are considering will mean enhanced due diligence checks on donations from unincorporated associations.

In exclusive polling, Sky News has found that any money given to parties by foreign donors is incredibly unpopular.

A total of 77% of respondents thought foreign nationals who are not registered to vote in the UK should not be allowed to donate to political parties, while only 7% thought they should be.

Even looking specifically at Reform UK voters, who would likely benefit from an Elon Musk donation, the percentage is roughly the same: 73% said they shouldn't donate to British politics at all, while 7% said they should.

There is a lot of cash swirling all around Westminster and foreign money can and does enter UK politics.

Transparency International found almost £1 in every £10 donated to parties and politicians came from unknown or dubious sources between 2001 and 2024.

Whatever the motivation, these changes could bring greater transparency to what's behind any murky money swirling into Westminster.

(c) Sky News 2025: New rules may stop Elon Musk from making unlimited donations to Ref