Britain's 281 smallest political parties have a combined total expenditure of £1.7m, according to the latest figures.
Financial accounts published by the Electoral Commission outlined the income and expenditure of smaller parties during 2008.
Of the 281 parties, many will have candidates running in the upcoming June elections.
Civil penalties are to be imposed upon ten parties and five 'accounting units' due to their failure to submit accounts to the watchdog on time.
Electoral Commission chief executive Peter Wardle said: "Public trust in democracy depends on transparency about where parties get their money from and how they spend it. Recent events have made that clearer than ever."
He noted the importance for democracy of having a wide range of political parties.
"That is why, earlier this year, we wrote to every registered party and every party accounting unit reminding them of what they needed to report to us and offering them advice and guidance on how to fulfil their statutory obligations," Wardle explained.
"We're pleased that the trend of parties reporting on time to us continues to improve, especially amongst these smaller parties who are often less well resourced that the larger parties."
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