“Further action” is being considered against Nigel Farage after he failed to declare £205,000 of donations over the past decade relating to the the rent-free use of a constituency office.
The belated disclosure of the donation from party supporter John Longhurst, which dates back to 2001, could result in the leader receiving a fine or at worst a jail sentence.
The Ukip leader’s barn-turned-office in Littlehampton was subject to scrutiny earlier this year when it was revealed £17,000 had been spent on it in one year, not including rent, staff costs, equipment or telephone bills.
Mr Farage denied misusing or profiting from his MEP allowances and said a fair portion was spent on electricity.
Details of the West Sussex converted grain store was news to the Electoral Commission, the independent politics watchdog, which undertook its own investigations.
Under the Political Parties, Elections and Referendums Act 2000, Mr Farage was required to report party donations to the Electoral Commission within 30 days of receiving them.
Despite declaring the 14 benefit-in-kind donations from Mr Longhurst to the European Parliamentary register in Brussels, he reportedly failed to tell the British elections watchdog until 16 May.
"When we became aware of the potential unreported donations, we were in correspondence with Mr Farage," a spokeswoman for the commission said.
"This then led to the donations being reported to us. We have not yet made a decision about whether any further action will be taken against Mr Farage for reporting the donations late.
"We are continuing to review all of the necessary information supplied to us by Mr Farage and are considering it carefully."
Punishment for declaring donations late can be as much as a £20,000 fine or a 12-month prison sentence.
A spokesman for Ukip said: "Every year since 2001, Mr Farage has declared in his European Parliament Register of Interests the use of a rent-free office from J Longhurst Ltd.
"The premises has been used as his MEP office so the European Parliamentary register was the logical place for it to be declared.
"Mr Farage was surprised to learn that the Electoral Commission thought it should be informed as well, as this did not accord with the professional advice he had received at the time."
Join our new commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies