The Electoral Commission has opened an investigation into the Labour-supporting Momentum group to see if it breached finance rules in relation to spending during the 2017 election.
The elections watchdog says its probe will consider if Momentum’s returns included accurate donation information.
It said questions over compliance risked harming voter confidence.
Momentum was set up to support Jeremy Corbyn’s successful 2015 leadership bid and now campaigns for Labour.
The grassroots movement was registered as a non-party campaigner during the snap 2017 general election in June.
Bob Posner, the Electoral Commission’s director of political finance, regulation and legal counsel, said: “Momentum are a high profile active campaigning body.
“Questions over their compliance with the campaign finance rules at June’s general election risks causing harm to voters’ confidence in elections.
“There is significant public interest in us investigating Momentum to establish the facts in this matter and whether there have been any offences.”
The Electoral Commission said the investigation would look at whether or not Momentum accurately recorded donations and payments relating to the 2017 campaign.
It would also consider whether a return failed to include all invoices and payments of more than £200.
Mr Posner said: “Once complete, the commission will decide whether any breaches have occurred and, if so, what further action may be appropriate, in line with its enforcement policy.”
Under rules in place since 2000, non-party campaigners who wish to undertake “targeted spending” – intended to influence people to vote for one particular registered political party or any of its candidates – have to do so within prescribed limits.
The limits – £31,980 in England, £3,540 in Scotland, £2,400 in Wales and £1,080 in Northern Ireland – applied during the regulated period 9 June 2016 to 8 June 2017.
Momentum under investigation by Electoral Commission}