VAT on Free Events

If an event is run for free, then it should be treated as non-business activity and no VAT reclaimed on purchases. When making purchases for these events, you should select VAT code PN - Purchases No VAT, putting in the notes that the purchase is for a free event so you are not reclaiming the VAT.

The exception to the above rule is where the costs are covered by sponsorship of the event - if an external sponsor has provided funding for the event in exchange for a taxable service such as advertising.