Nigel Farage’s Brexit Party is facing a visit from the election watchdog to probe concerns around the legality of its funding.

Questions have been raised over the source of donations to the party because they are paid online through PayPal, which does not track whether the cash is coming from foreign sources.

Former prime minister Gordon Brown called for an investigation, stressing voters need to know “where the money is coming from, who is giving the money, whether the money is coming from foreign sources, including America and Russia, and whether rules are being broken”.

The Electoral Commission confirmed it would be visiting the party’s offices on Tuesday to “conduct a review of the systems it has in place to receive funds”, including donations over £500 which have to be from a UK source.

A spokesperson said: “The Brexit Party, like all registered political parties, has to comply with laws that require any donation it accepts of over £500 to be from a permissible source.

“It is also subject to rules for reporting donations, loans, campaign spending and end of year accounts. We have already been talking to the party about these issues.

“As part of our active oversight and regulation of these rules, we are attending the Brexit Party’s office tomorrow to conduct a review of the systems it has in place to receive funds, including donations over £500 that have to be from the UK only.

“If there’s evidence that the law may have been broken, we will consider that in line with our enforcement policy.”

Earlier, Brown insisted an investigation was necessary because there are already questions over Farage and the Leave.EU campaign he ran with tycoon donor Arron Banks. 

The former Labour leader told an audience in Glasgow: “Democracy is undermined when we have undeclared, unreported, untraceable payments being made to the Brexit Party.

“We have the potential for underhand and under-the-counter payments being made.

“You know the history of this – Leave.EU, Nigel Farage and Arron Banks’ campaign is now under criminal investigation.

“There’s three investigations – one by the National Crime Agency, one by the Met Police and one by the Information Commissioner.

“Arron Banks, the lead funder of Leave.EU and the friend of Nigel Farage has been under investigation – he has made contacts with Russia. We don’t know where his money comes from.

“And yet we find out last week that he has given £450,000 in payments to support Nigel Farage, while Nigel Farage was in a public office in the European Parliament, who should have been declaring the payments that he was receiving from anyone to avoid any conflicts of interest.”

Farage accused the former premier of an “absolutely disgusting smear” against his party.

“This from the man who was part of a Labour Party who, through Lord Levy, were making a lot of big donors members of the House of Lords,” Farage said on a campaign visit to Exeter.

“How dare he? Most of our money has been raised by people giving £25 to become registered supporters and nearly 110,000 of them now have done that.

“Frankly, this smacks of jealousy because the other parties simply can’t do this.

“How open can we be? What you have got here are the conspiracy theorists doing their utmost to try and delegitimise what is the fastest-growing political movement this country has ever seen.”