Brexit Party ordered to overhaul fundraising methods to prevent illegal foreign donations

'High risk' action plan drawn up by the elections watchdog – including checks on all £2.5m Nigel Farage's party has received

Nigel Farage’s Brexit Party has been ordered to radically overhaul its fundraising methods to stamp out the risk of illegal foreign donations.

A four-point “high risk” action plan has been drawn up by the elections watchdog – including checks on all £2.5m it has received so far and tougher curbs on who can donate.

The crackdown follows the Brexit Party’s chairman admitting he did not know whether its PayPal account was taking foreign cash, saying: “I don't know what currencies people are paying in.”

Controversially, it accepts sums of under £500 – the level below which the donor can remain anonymous – but creating the danger of multiple small donations by the same person.

Now the Electoral Commission action plan calls on Mr Farage’s party to:

* Review “all payments, including those of £500 or below, it has received to date” – and report any breaches.

* Change its online system for accepting payments to require donors provide their full address and contact details – while only accepting payments from a card with matching billing and payer addresses.

* Remove the £500 limit, because it may “encourage those who want to make a payment in excess of £500 to make multiple payments”.

* Prevent people signing up as 'registered supporters' “without completing the payment process”, to ensure its records are accurate.

“Based on the information we reviewed, we assess the party to be at risk of noncompliance with its financial scheme and obligations under PPERA [the Political Parties, Elections and Referendums Act 2000], a Commission spokesman said.

“In particular, the fundraising structure the party have adopted, coupled with insufficient procedures, leaves it open to a high and ongoing risk of receiving and accepting impermissible donations, and being unable to maintain accurate records of transactions.”

The spokesperson added that problems “identified as high risk should be reviewed and improved as soon as possible, and all recommendations implemented within six months”.

The Commission carried out an inspection after Gordon Brown claimed that democracy was being undermined by “undeclared, unreported, untraceable payments”.

The former Labour prime minister pointed to the ongoing investigations into Leave.EU, Mr Farage’s campaign group during the 2016 referendum, and his key funder Arron Banks.

Last month, it was revealed that Mr Banks had bankrolled his ally’s “lavish lifestyle” to the tune of £450,000 in the year that followed.

The rules on identification do not apply to sums of less than £500 given to parties, because they are not recognised as official donations.

However, parties are expected to use methods that guard against foreign donors making many small donations that, in total, exceed the £500 limit.

Richard Tice, the Brexit Party’s chairman, admitted he did not know whether its PayPal account was taking foreign cash, saying last month: “I don't sit in front of the PayPal account all day.”