Reform to hand crypto investors hundreds of millions in tax breaks

Reform UK’s tax plans would hand wealthy crypto investors hundreds of millions in tax breaks if Nigel Farage wins the next election, The Independent can reveal.

British politics has been rocked by two gifts totalling £72m given to the party by crypto billionaires Christopher Harborne and Ben Delo, who last week handed over £36m each.

The donations have prompted major questions over what the donors want in return for their cash, but Reform insists the pledges are entirely legal and the men are patriots who want nothing but to support the party to get ready to govern.

Now, a new analysis of HMRC data by the Labour Party shows that capital gains tax breaks promised by Reform to crypto investors would be worth more than £100m a year, based on investments in 2025 alone.

And that could go much higher if investing in crypto is incentivised – presenting a huge incentive for investors to back the party.

Two leading tax experts told The Independent there is “no justification” for tax relief on the sector and warned it could harm the economy if implemented.

Economist Paul Johnson, a former director of the highly respected Institute of Fiscal Studies (IFS), said: “There is quite clearly no feasible economic rationale for treating crypto more leniently than other economically productive assets.”

At a time of a cost of living crisis when Reform also wants to slash welfare spending, he added: “Capital gains tax payments are very highly concentrated among a small group of people with very large gains.”

Tax lawyer Dan Neidle said: “It's not obvious whether these plans would generate any growth. If it incentivizes people to shift from productive assets into cryptocurrency, it could retard growth.”

Reform’s policy includes cutting capital gains tax (CGT) on crypto assets from the current level of 24 per cent for higher-rate taxpayers and 18 per cent for basic-rate taxpayers, to a flat 10 per cent.

An analysis of this policy shows that most of Reform’s giveaways would go to a very small high-earning group, with official HMRC statistics published last month showing that 240 people in 2024/25 reported more than £1m in capital gains from crypto assets.

This tiny group of crypto millionaires made £717m of the total £1.38bn crypto asset gains – reported by 17,600 people – in 2024/25, HMRC figures show.

Under Reform’s plans to slash CGT, the high-earning group of crypto investors would save around £100m a year. That means a tax cut worth half a billion pounds going to 240 millionaires over the course of a five-year parliamentary term.

The Labour Party has vowed to take action to limit crypto donations, with housing secretary Angela Rayner warning her party could change the law retrospectively to force Reform to hand the £72m donations back.

A spokesperson for the party said of the analysis: “Farage and Reform are drowning in sleaze and scandal. They can’t buy their way out of the questions that the public need answers to. It’s clear Reform is on the side of a handful of crypto-billionaires, while Labour is delivering the change people across the country want to see.”

A recent investigation by The Independent revealed that a staggering 60 per cent of the Reform’s donations since the general election came from people linked to crypto – even before the latest two mega donations from Mr Harborne and Mr Delo

The Reform UK leader has also personally invested in the Tether stablecoin the crypto currency linked to Mr Harborne, who had previously given the party £15m.

Mr Harborne also gave Mr Farage a separate £5m, which is currently being investigated by the Standards Commissioner because the Reform leader failed to declare it.

Mr Farage has insisted the cash was a personal gift for his security and that he was advised he did not need to declare it as it was before he was an MP.

Sources close to Mr Farage have described Labour’s hostility to crypto currency as “economically incompetent” after further questions were asked about him investing in crypto after he admitted he knew Vladimir Putin was using it to evade sanctions.

Responding to the latest analysis, a Reform UK spokesman defended the party’s position, insisting it is the only one with constructive plans to deal with the new industry.

He said: “Reform UK are the only party calling for proper regulation of cryptocurrency and ensuring that consumers are protected.