The UKCC has been operating for 20 years and has never charged VAT on entry fees, despite the turnover exceeding the VAT threshold.
The chess world seems split over their reaction to Mike's predicament. Clearly, he has been errant in not checking if VAT was chargeable and did not employ an accountant (who would, almost certainly, have advised him that it was). There is some sympathy for Mike who has introduced chess to thousands of children over the years. Whether the UKCC can continue is in doubt. It may need to be re-badged and almost certainly Mike Basman will not be taking a leading role.
A petition has been organised to try and get chess (or junior chess at least) exempted from VAT. All physical sports are exempt, but 'mind sports' are not.