Why has Farage resigned and what happens next?

Reform UK leader Nigel Farage has quit as MP for Clacton so he can trigger a by-election to win back the Essex seat.

This kind of election is normally only held when an MP dies or is forced to stand down.

It is highly unusual for a sitting MP with a healthy majority to seek to be re-elected by his own constituents.

So what is going on?

Farage's announcement came after The Sunday Times reported he received financial support from a longstanding ally before he became an MP, which he did not declare to parliamentary authorities after his election in 2024.

The story came after it emerged earlier this year he separately received a £5m gift from a party donor before the election, which he also did not declare.

The revelations have prompted a row between Farage and opposition parties, along with extensive media coverage of his financial affairs.

But in a video statement, Farage said he had done nothing wrong and he wanted voters to judge his actions rather than journalists, adding that parliamentary investigations had become a "political tool".

He also said he spent the weekend thinking about his future after complaining about media treatment of his family in the wake of the Sunday Times story being published.

Reform says it wants the by-election to take place on Thursday 6 August, although the parliamentary process to confirm this is yet to take place.

Farage remains Reform UK leader and has made clear his pitch to voters will be that voting him back into Parliament would be a chance for them to "stick two fingers up to the entire establishment".

Farage accused Labour of wanting to stall his party's progress by changing the rules on donations, granting 16 and 17 year-olds the right to vote, and its later-reversed bid to delay council elections in England.

Farage won the Clacton seat by a majority of more than 8,000 votes over the Tories in 2024, with Labour second and the Lib Dems a distant third.

But this time rival parties, including Labour, the Conservatives, the Lib Dems, the Greens and Restore Britain, have decided not to stand candidates against him, branding the contest a "gimmick" and a "circus".

It raises the prospect that Farage could be left to run against a collection of independent candidates, including comedian Jon Harvey, who regularly runs in by-elections as fictional spacetraveller "Count Binface".

Farage say his party has offered to pay for the costs involved in holding the by-election, but Downing Street says candidates are not allowed to cover this.

Farage had already faced weeks of headlines about the £5m gift he received before entering Parliament from Christopher Harborne, a Thailand-based British cryptocurrency investor and major Reform donor.

Parliament's standards commissioner is investigating whether he should have declared that sum upon becoming an MP in his published register of financial interests.

In the latest story, The Sunday Times reported Farage also received support ahead of the 2024 election from George Cottrell, a political ally who was jailed for eight months in the US in 2017 after pleading guilty to a charge of wire fraud.

According to the newspaper, this included paying for staff who provided Farage's security and worked on his social media content, whilst he also used a property near Buckingham Palace rented by Cottrell.

Lawyers for Cottrell say he disputes "allegations and assertions" in the story, and he was reviewing the matter with legal representatives.

Parliament's rulebook says newly-elected MPs have to declare gifts or benefits, including accommodation, received in the 12 months before their election that relate to their "parliamentary or political activities".

However, there is an exemption for gifts and benefits that are "purely personal".

The guidelines say MPs should consider "both the possible motive of the giver and the use to which the gift is to be put" when deciding whether to make a declaration.

Farage says he has chosen to earmark the £5m sum for his future security costs, but the gift was "unconditional" and how he ultimately spends it was "entirely up to me". In an interview with ITV in late June, he said he was yet to spend the money.

He has argued that the £5m gift did not require declaration as it was given to him in a personal capacity before he was an MP.

In an interview after the Sunday Times story was published, Reform Treasury spokesman Robert Jenrick said Cottrell had contributed towards Farage's staffing and security costs before he was an MP.

But he denied this required declaration, as the support was received in a "purely personal capacity" and was "nothing to do with his job as a Member of Parliament, because he wasn't a Member of Parliament".

The investigation into the £5m gift, led by standards commissioner Daniel Greenberg, was launched in May but is yet to conclude.

It will be paused during the by-election campaign, but will resume if Farage is successfully re-elected to the Clacton seat.

If Greenberg finds that Farage broke the rules by failing to register the gift, one possible outcome is a suspension of more than 10 days, which would enable voters in Clacton to decide whether to trigger another by-election.

Rival parties have said they would stand candidates in such a by-election, presenting a sterner electoral test for the Reform UK leader.

Opposition parties have also called on Greenberg to open a second investigation into whether the support reportedly given by Cottrell should have been declared too. He is yet to confirm if he will do so.

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