Readers’ forum: Can company claim input tax?

One of my clients rents a shop in a town centre location and trades as a clothing store and is registered for VAT. The business trades as a limited company and he is the sole director.

My client has suffered major cash flow problems in recent years so has a poor credit rating personally and the company has an overdrawn balance sheet due to the balance he has invested personally through his directors loan account.

As a result of these financial problems the landlord insisted that the lease for the shop is in the name of my client’s wife and issues invoices addressed to her and charges VAT. This is because the landlord has opted to tax the premises. The invoices are all paid directly by the company and the company also pays for repair costs because it is a tenant repairing lease. My view is that...