THE ELECTION watchdog was in the High Court today over its decision to let Vote Leave spend £725,000 with an advertising company by “donating” the cash to third parties.

The Good Law Project (GLP) is challenging the Electoral Commission over “donations” made by Vote Leave just before the referendum vote in June 2016.

Vote Leave paid £625,000 to Canadian data and marketing company Aggregate IQ, apparently on behalf of fashion student Darren Grimes.

The commission agreed with Vote Leave that it should not be considered its own expenditure as there was no “common plan” between Mr Grimes and Vote Leave.

But GLP claim that the cash — and £100,000 said to have been donated to Veterans for Britain — should be considered as a Vote Leave expense.

GLP’s Jessica Simor QC said the case raised important questions about the control of “referendum spending by different groups on the same side of a referendum campaign.”

She said spending limits were in place to prevent an “expenditure arms race” while recording rules were to ensure campaigners remain within the limits.

The Electoral Commission’s interpretation of the rules “risk entirely undermining” their purpose, Ms Simor charged.

GLP claims that, had the £725,000 in question been considered Vote Leave’s expenses, it would have exceeded its spending limit by “more than 10 per cent.”

The commission contends that “it was Mr Grimes who contracted with Aggregate IQ and thereby ‘incurred expenses’” under the referendum rules.

The hearing continues.