The probe follows a European Parliament audit on Monday which said UKIP will have to renounce hundreds of thousands of euros (dollars) of EU funding after misspending part of the grants on campaigning in Britain.
"The commission has now opened its own investigation into UKIP to look at whether there has been any breach of UK election law," the Electoral Commission said in a statement.
"This includes whether any impermissible donations have been accepted by the party," it said.
"The ADDE will now not receive the remaining 20 percent of the grant (248,345 euros) allocated for 2015 and will need to reimburse a sum of 172,654 euros from the 80 percent of the grant which was advanced to the party," it said.
The breaches related to nine opinion polls held in Britain ahead of the 2015 general election -- including on anti-EU sentiment -- as well as ahead of the EU membership referendum in June.
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