The fine is the maximum possible penalty the Electoral Commission can issue, with the watchdog claiming that more than 300 payments totaling £184,676 were excluded from party spending returns.
The Lib Dems suffered from “systemic failures” during last year's General Election campaign spending, Electoral Commission director of political finance Bob Posner said.
“This is an experienced party that failed to meet the basic requirements of the law, and cases like this undermine voters’ confidence in our political finance system.
“This is why we have applied the highest financial penalty available to us,” Posner said, adding that the watchdog was concerned that its maximum fine was no longer a strong enough deterrent.
The commission has also notified police of a possible criminal offence, should the party's campaigns officer Tim Gordon have knowingly or recklessly signed false declarations.
A Lib Dem spokesman said: "These mistakes, caused by issues with a small number of local accounting units, were a result of human error and failures of process. We are taking steps to ensure these mistakes are not repeated in future. We will co-operate fully with any investigation."