Mr Farage and seven other Ukip MEPs were last February accused of spending money meant to fund their offices on Ukip party matters – leading the Parliament’s financial watchdog to launch an investigation.
The Guardian reports that Mr Farage will now pay back £35,500 (€40,000) through having his salary withheld, after auditors concluded he had indeed misspent the funds.
The allegations centred around claims that EU-funded parliamentary assistants were actually working for the national party and doing work unrelated to the duties of MEPs.
Under EU rules, full-time assistants to MEPs are not allowed to do paid work for national parties, while part-time assistants must have their second jobs vetted by the European Parliament watchdog to prevent conflicts of interest.
Following the revelation, Mr Farage told the MailOnline website that the EU was “just being vindictive” to him because of his role in the Brexit vote and that he was being treated as “guilty until proven innocent”. He said he rejected the parliamentary authorities’ claims.
A Ukip spokesperson declined to comment on the matter when contacted by The Independent on Friday afternoon. The Independent has not yet received a comment from the European Parliament’s authorities.
Last month Mr Farage raised eyebrows when he said he was “skint” at 53 years old, despite being entitled to the £90,000-a-year MEPs’ salary and living in a £4 million townhouse. He will also be entitled to claim an EU pension, understood to be worth £73,000 a year.
Ukip is more reliant on EU funding than other British political parties because of its success in European Parliament elections entitling it to Brussels-funded staff.
The Eurosceptic outfit’s failure to win MEPs in Westminster elections – or hold onto council seats – has deprived it of other potential sources of revenue such as short money, or the top-slicing of councillors’ allowances.
Mr Farage has been an MEP for South East England since 1999. Though no longer leaders of Ukip, he chairs the Europe of Freedom and Direct Democracy parliamentary group, in which Ukip sits in the European Parliament.