Corporate political donations should be banned altogether because the Representation of the People Bill will not stop companies being used to funnel anonymous and foreign money into UK politics, argues a new report from the Centre for the Analysis of Taxation (CenTax).
They find that the current system fails to deliver transparency or prevent foreign interference, and that the Representation of the People Bill, currently being debated by parliament, will not fix these problems.
Researchers linked over 4,000 corporate donors reported to the Electoral Commission between 2001 and 2024 to Companies House records – the first systematic effort to identify the individuals behind corporate political donations.
Almost one in every ten pounds donated by companies comes indirectly from individuals who are likely to be ineligible to donate directly. Their donations are on average almost twice as large as those from companies with UK-eligible owners. These are conversative figures: the true extent of foreign interference is obscured by the large proportion of opaque corporate donors.
Around a quarter of donor companies are opaque, meaning it is not possible to identify who controls them as they either report no person with significant control at all, or control runs through someone else, such as a trustee, rather than a beneficial owner. These opaque companies account for a quarter of all corporate donations by value and companies that donate are significantly less transparent than UK companies generally.
The tax system provides an implicit subsidy of up to 39% for political donations routed through companies. Donations to political parties are not eligible for Gift Aid relief – but company owners can effectively engineer the same tax saving by donating through their company. Treating corporate political donations as taxable dividends would raise around nearly £6 million annually – which could fund a 15% increase to the Electoral Commission’s annual budget
The Bill’s reforms are easy to dodge. A donor wishing to avoid scrutiny need only restructure their affairs to no longer appear on the register of People with Significant Control used in the Bill. And the cap on how much a company can donate is based on turnover – which can be artificially inflated – and applies separately to each recipient, so a company could donate its full revenue many times over.
CenTax strongly recommends banning political donations by companies altogether. There is extensive international precedent for a ban on corporate donations, including from France and Canada. The Bill already accepts that a company’s right to donate depends on the rights of its individual owners. If those individuals can donate directly, there is no clear reason to allow corporate donations.
If a ban lacks political support, the report recommends six reforms including:
- A donor registration system requiring all but the smallest donors – both individuals and companies – to register with the Electoral Commission before donating.
- Mandatory disclosure of ultimate controllers of all non-individual donors directly to the Electoral Commission, removing reliance on the PSC register and loopholes for unincorporated entities.
- Closing the foreign interference loophole so that only entities controlled by individuals on an electoral register can donate, with criminal penalties for false statements about the source of donations.
- Equal treatment of unincorporated associations, and
- Removal of the tax subsidy for corporate donations.
Arun Advani, Director of CenTax and Professor at the University of Warwick, said:
“Around a quarter of money donated by companies is completely untraceable, and at least one pound in ten comes from individuals who could not donate directly. The Bill is a welcome opportunity to fix this, but its current provisions won’t do so and risk providing a false sense of security.”
Sebastian Gazmuri-Barker, Senior Legal Analyst at CenTax, said:
“The Bill’s proposed tests contain loopholes that are easily exploitable. Parliament should either ban corporate donations outright or significantly strengthen the approach. Relying on a corporate ownership register that was never designed for this job will not work.”
ENDS
Notes to Editors
- The Centre for the Analysis of Taxation (CenTax) is an independent research centre dedicated to improving public understanding of tax policy and helping to design a better tax system.
- The Representation of the People Bill passed Second Reading on 2 March 2026 and is currently in Public Bill Committee, which is expected to report by 23 April 2026.
- Twenty-seven per cent of countries worldwide ban corporate donations, including France and Canada, according to a 2025 study by the International Institute for Democracy and Electoral Assistance.
- Between 2001 and 2024, individual donors accounted for the largest share of reportable donations at £700 million, followed by corporate donors at £293 million and trade unions at £247 million. The top 1% of individual donors gave just over half of all individual donations, whilst the top 1% of corporate donors accounted for 45% of all corporate donations.
- Two members of the Sainsbury family appear under 18 different name variants across 93 separate donor IDs in the Electoral Commission data. There is no suggestion that these discrepancies were intended to conceal the source of donations, but it illustrates the lack of transparency under the current system.
- The full report, The Regulation of Political Donations: Recommendations for the Representation of the People Bill, by Arun Advani, Josh Flew, Sebastian Gazmuri Barker, Johnathan Inkley and Andy Summers, is published at 00:01 on 19 March 2026 and is available here.
