Nigel Farage broke electoral law in failing to declare donations worth £200,000 during a period of 14 years, the independent politics watchdog said.
Its investigation was prompted when The Times revealed in Aprilthat Mr Farage had been given a constituency office near Littlehampton, West Sussex, rent-free since 2001, shortly after he became an MEP.
Mr Farage did not declare the gift until May 16, a month after the article, although electoral law requires all such donations to be registered within 30 days of being received.
Yesterday the commission published figures showing that rent for the office, which was provided by John Longhurst, a local farmer and Ukip supporter, had now been declared as a donation-in-kind worth £15,000 a year since 2001.
Mr Longhurst also registered an additional donation-in-kind of more than £10,000 in early 2001, bringing the total value of the donations to £205,602.
The commission said that it was considering what disciplinary action to take against Mr Farage for breaching electoral law.
The belated declaration also raises fresh questions over how the MEP used EU funds intended to pay for the office.
In transparency reports published since July 2009, Mr Farage claimed to have spent an average of £15,500 a year of EU money on “office management and running costs” , which solely covers rent, utilities, business rates and insurance and cleaning for the small former grain store.
As Mr Farage has received the office rent-free since 2001, his total spending on the management costs, which excludes stationery, staff salaries, office equipment and communications, could reach almost £200,000.
Asked how Mr Farage could have spent so much money on utilities, business rates and insurance and cleaning, a Ukip spokesman did not comment.
The party said in a statement: “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.”
However, copies of the register of interests obtained by The Times show that Mr Farage had not declared any donations for his office or from Mr Longhurst in 2001 and the first half of 2002. Although he has declared that he had an “office provided rent-free [by] J Longhurst Limited” in his 2013 register of interests, officials were unable last night to provide documents covering the intervening period.
In an interview on BBC Radio 4’s Today programme in April, Mr Farage indicated that he would be prepared to allow an independent audit of his accounts but added that he would only do it if every other MEP did the same.
Peter Wilding, director of the pro-EU British Influence think-tank, said that the Ukip leader should now go ahead. “This is one scandal too many,” he added. “Ukip’s sleaze must now be confronted once and for all.”
A spokeswoman for the Electoral Commission confirmed that it was considering what action to take against Mr Farage over the late donations. He faces a fine of up to £20,000 or a possible criminal prosecution with a maximum sentence of 12 months in jail if a jury convicts him of an offence under the Political Parties, Elections and Referendums Act.