Readers’ forum: Is there VAT to pay on charges for networking events?

One of my clients organises networking events. He makes a loss on every event because of the hotel charge for food drink and a room but he is happy to cover this loss because of the potential business leads he gets. My question concerns VAT: although he is VAT registered my client has not charged VAT on the £25 charge made to each delegate on the basis that he is making a loss and not providing any VATable service to the delegates. The aim of the charge is to encourage attendance and minimise cancellations.

As the events are popular the amount of potential VAT not charged is considerable and as a separate issue my client has claimed input tax on the hotel costs. What do readers think is the correct VAT treatment here for input and output tax purposes?

Query 20 042 – Networker....