The £5 million gift to Nigel Farage from crypto billionaire Christopher Harborne has sparked intense scrutiny, with the Conservative Party now calling on HM Revenue & Customs (HMRC) to investigate whether the payment should have been taxed as income. A letter to the tax authorities, penned by Conservative Party Chair Kevin Hollinrake, raises questions about the nature of the funds and whether they were connected to Mr Farage's return to the leadership of Reform UK and his current candidacy for Parliament.
The inquiry follows reports that Mr Farage had told senior Reform UK figures he would require £1 million per year in compensation if he stood for election. This has led to suggestions that the £5 million payment may not have been a genuine gift, but rather linked to his political activities. A document reportedly drawn up by Mr Harborne described the payment as 'unconditional', but the Conservative Party is now examining whether it might be classed as taxable income.
Mr Hollinrake's letter to HMRC suggests that if the payment was indeed connected to discussions about Mr Farage's return to politics, there could be serious questions over its classification. The tax expert Dan Neidle has previously raised similar concerns about the tax implications of the £5 million gift. The inquiry also highlights existing scrutiny faced by Mr Farage, who is currently contesting a parliamentary standards investigation into the same gift and other undeclared funding.
The outcome of the HMRC investigation could have significant implications for Mr Farage's financial affairs and his prospects in the upcoming Clacton by-election. Reform UK has been approached for comment on these allegations.