TOWN council coffers are expected to be hit in the region of £10,000 following a failure to register for VAT over nine years.

Members of Middlewich Town Council first feared the bill could have been in excess of £100,000 when the bookkeeping failure first came to light last December following an audit.

A second audit report was presented at Monday's meeting, which showed the town council faces a bill of £49,134.97 having failed to register for VAT despite meeting the threshold since June 2011 – when it took responsibility for the Folk and Boat Festival.

However, that bill will be offset by VAT reclaim that is due to come back to the council, which is expected to be in the region of £40,000.

"I think we are all exhaling a deep breath there because we could have been hit considerably," said Labour Cllr Mike Hunter, chairman of Middlewich Town Council.

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Clerk Lisa Benskin added that the looming bill is 'not anywhere near as bad as I think it could have been'.

The town council is now VAT registered and is waiting for its VAT number, but it could still be hit by fines for late payment.

Cllr Hunter added: "What we hope is that because we have gone to them, rather than they have come to us, they will be more lenient."

Cllr David Latham, independent, told members he was 'just flabbergasted' the previous auditors did not inform the council about the VAT situation.

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He said: "Even as a self-employed person when you do your year-end, any accountant worth their money would turn round and say you are getting close to the VAT threshold.

"They should have been advising us and I can't believe the past clerk was not contacted about it."

Ms Benskin confirmed that the council would seek legal advice once it knows the final bill, with a view to considering if the previous auditor may be liable alongside the town council.

Middlewich Town Council's tax precept increased by 3.9 per cent last month, as members reluctantly voted increase it in January in light of the looming VAT bill.

It will rake in an additional £18,320 this year over last year's tax intake, including both the precept hike and the addition of new households.

A second audit report found that further work needs to be done by the town council to get its books in order.

All but two of the 27 failures flagged up in the previous audit report have now been addressed.