Leave.EU received more than £12m of campaign services from a company controlled by the businessman Arron Banks, despite its referendum spending being capped at £700,000.

A business associate of Banks said the services were provided prior to the referendum spending cap taking effect in April 2016, and therefore entirely legal.

But the disclosure, at a time when Electoral Commission investigations into leave campaign financing are continuing, will raise serious concerns about the ease with which laws restricting campaign spending can potentially be circumvented.

The Labour MP Ben Bradshaw said there were “serious questions that need answering” in response to the new admission.

“I would hope and expect the National Crime Agency and Britain’s financial regulators to be taking a serious look at this rather than leaving everything to the Electoral Commission and parliamentary committees whose powers of investigation and sanction are very limited,” said Bradshaw, who has previously called for an inquiry into referendum funding.

Accounts for Better for the Country Limited, filed with Companies House, say it provided £12.4m of “administrative services” to Leave.EU in the year to May 2016.



“During the year the company provided administrative services of £611,184 (2016: £12,392,258) to Leave.EU Group Limited, a company with common directors,” the accounts state.



Both companies are already under investigation by the Electoral Commission over their activities surrounding the EU referendum. They are controlled by Banks.

Banks had previously been reported to have donated £9m to Leave.EU. Following publication of this article, lawyers for Banks contacted the Guardian to say that the £12m of services detailed in Better for the Country’s accounts included that £9m figure.

When asked what the administrative services entailed, Liz Bilney, the chief executive of Leave.EU and a director at both companies, said they related to “campaign management services, ie everything that was spent and recharged in running and setting up the leave campaign to the month and year to May 2016.”



The timeline suggests Leave.EU received the sum in a comparatively short period of time. The group was incorporated in September 2015, five months before David Cameron formally announced the referendum. The regulated period, in which Leave.EU’s spending cap of £700,000 took effect, began on 15 April 2016.

Leave.EU reported no donations, spending or loans from Better for the Country in its filings with the Electoral Commission, which are publicly available. Bilney explained that this was because Better for the Country provided the services prior to the spending cap taking effect, and she said proper consideration had been given to whether they needed to be reported.



“It includes costs prior to the regulated period, which were assessed as to whether any element should be included in the regulated period,” she said.

It remains unclear what the £12m of campaign management services entailed, and when Better for the Country began providing them. Bilney refused to elaborate on what the “campaign management services” were, and insisted the phrase was self-explanatory.

“Every single invoice was analysed to ensure that it did not correspond or have any overlap into the regulated period,” she said. “So if the Electoral Commission have any issue with that, they will be looking at it, and we don’t need you to be looking at it.”



When asked how a company of 33 employees had generated £12m of expenses, Banks said: “The campaign sent 11m letters, millions of leaflets, Facebook advertising, rallies around the country, and so on.”

The Electoral Commission declined to comment and directed the Guardian to its two continuing investigations.

Darren Hughes, the chief executive of the Electoral Reform Society, said it would be for the commission to determine the facts of any individual case, but called for the government to update electoral finance laws.

“Spending limits are there for a reason: to prevent campaigns being held to ransom by big donors, and to prevent an arms race between opposing factions,” he said. “Politics must not be won on the basis of who can spend the most but on a level playing field of clear, reasoned arguments.

“Whatever the facts of this case, it is time for a review of election spending rules – they must be made crystal clear.”

• This article was amended on 14 May 2018 to reflect that after publication lawyers for Arron Banks contacted the Guardian to say that the £12m of services listed in Better for the Country Limited’s accounts included the £9m that Aaron Banks has already been reported to have provided to the Brexit campaign. The article had initially stated that the £12m was in addition to the £9m.

