Auditor's liability for not registering for VAT ??
A charity has been operating for 30 years. The trustees believed that as a charity it did not need to charge VAT.
An internal review lead them to question this and they approached HMRC .
They have reviewed the correspondence and guidance received from HMRC and have now registered for VAT, on the advice of their current auditors, and have received a tax bill for £500k. This seriouly threatens the very existence of the charity. Will they have recourse against their former auditors who had never questioned or raised the need to register for VAT ??