As a result of the EU Referendum last year, businesses have been engaging with the British public about important political issues facing the country like never before. Following last week's surprise announcement that a Parliamentary General Election will take place on 8 June 2017, businesses are again considering whether they wish to get involved in the campaign. 

Whether they decide to do so or not, businesses will need to ensure they stay on the right side of the rules on campaign spending by non-party campaigners.

What's the issue?

Despite the General Election only having been announced on 18 April 2017, the Electoral Commission has confirmed that the regulated campaign period commenced on 9 June 2016, 365 days before polling day, and ends on 8 June 2017.

During that time, spending on campaigning activities is subject to strict spending limits.

• Individuals and businesses must not spend more than £20,000 in England or £10,000 in any of Scotland, Wales or Northern Ireland on campaigning activities (on a group-wide basis across the whole campaign period 9 June 2016 to 8 June 2017) without first registering with the Electoral Commission as a campaigner.
• It is a criminal offence for a person to authorise expenditure above the £20,000 limit to be incurred by or on behalf of a company that is not registered as a campaigner if they knew, or ought reasonably to have known, that the expenditure would be incurred in excess of the limit.

The regulated campaign period is set by law, but could result in some businesses inadvertently breaching the rules – and risk committing an offence – for undertaking activities before the election was announced.

What qualifies as a campaigning activity?

The list of possible campaigning activities set out in Part 1 of Schedule 8A of the Political Parties, Elections and Referendums Act 2000 ("PPERA") is broad. It includes:

• any material made available to the public at large or a section of the public (in whatever form and by whatever means – including websites, blogs, social media and advertising in newspapers or periodicals);
• canvassing or market research seeking views or information from members of the public; and
• press conferences or other public events.

Such activities will qualify as a regulated campaigning activity if they meet the "purpose test" set out in s. 85 PPERA, namely that the activity in question "can reasonably be regarded as intended to promote or procure electoral success" for:

1. one or more political parties; or
2. one or more political parties or candidates who hold particular opinions or who advocate (or do not advocate) particular policies or fall within a particular category of party or candidates.

Two aspects of the test are particularly of note for businesses that have undertaken or are planning to undertake activities relating to current political issues:

First, the test is objective: an activity can meet the test even if it was not intended to have the effect of influencing voters and/or does not explicitly name or endorse a particular party or candidate. When considering whether the purpose test is met, the Electoral Commission will consider the context, tone and timing of the activity and whether these factors, taken as a whole, mean that a reasonable person would regard the activity as intended to influence voters.

Secondly, the test is not limited to support for particular political parties or candidates; it may also apply to support for certain policies that are advocated for by a particular category of parties or candidates. For example, Gina Miller's recent tactical voting campaign, which advocates supporting candidates who "pledge to support a full and free vote on the Brexit deal", would meet the purpose test. Therefore, if a business were to undertake activities in support of Gina Miller's campaign, such activities would qualify as regulated campaigning activities.

Which costs incurred in connection with a regulated campaign activity count?

If an activity is a regulated campaign activity, certain expenses incurred in connection with that activity will contribute towards the regulated expenses during the regulated period. Such expenses are calculated by reference to the cost of the activity as a whole, rather than a particular aspect of the activity. Possible expenses include:

• relevant overheads and administrative costs, such as increased telephone or utility bills;
• in the case of public events, the hiring costs of premises, costs of the provision of goods, services and/or facilities at the event and the costs of any reimbursed travel, food or accommodation expenses in connection with the event; and
• the design, production and distribution costs of printed materials.

Can activities undertaken before the General Election was announced really be caught?

According to the Electoral Commission guidance, if an individual or business has spent money on regulated activities prior to the announcement of the General Election but that now falls within the regulated period, they should determine whether that spending is close to or already in excess of the threshold for registering as a campaigner.

If so, the Electoral Commission advises that such individuals or businesses should register as campaigners and that the Electoral Commission is "unlikely to consider enforcement action against non-party campaigners that have taken prompt steps to register, even if their regulated spending is already in excess of the registration threshold".

The Electoral Commission has confirmed that activities that promoted an outcome in the EU referendum campaign, rather than promoting a party or category of candidates in an election, will not count towards the regulated spending in the General Election.

Businesses should therefore consider whether past publications or events could reasonably be regarded as intended to influence voters in a General Election (irrespective of the fact that the election may not have been announced at the time) and, if so, whether costs incurred in respect of such activities bring them close to the spending threshold.

Campaign spending period different from "purdah" period

For the avoidance of doubt, the regulated period in respect of campaign spending is not the same as the pre-election "purdah" period, the period during which government activity is restricted to essential, non-policy related activity only between the announcement of a general election and polling day.

The Government published its purdah guidance for civil servants in connection the General Election 2017 on 20 April 2017. The guidance confirmed that the purdah period for civil servants took effect on Friday 21 April 2017.

The regulated period for spending is also different from the official parliamentary campaign that begins the day after the dissolution of Parliament, which will take place at one minute past midnight on 3 May 2017. During this period, there are no MPs in Parliament until the new Parliament is elected, whereas Government Ministers, who are technically appointed by the Queen, remain in place, albeit subject to purdah.