Readers’ forum: VAT registration dilemma

Our client Jack is a property investor and holds a large portfolio via a number of limited companies. He regularly incurs expenditure on capital improvements – such as erecting a loft or building an extension – and of course on ongoing maintenance of his properties – such as painting and decorating between tenancies on-call small repairs and so on.

Over the years Jack developed a working relationship with Peter an experienced builder and it is now Peter that undertakes all building and maintenance work for Jack’s companies.

When preparing the accounts for Jack’s companies we noticed that invoices were raised by Peter (via Peter Maintenance Limited) of £45 000 to one of Jack’s companies; £32 000 to another and £8 000–£12 000 each to a number of Jack’s other companies – all within year 2021.

Peter’s invoices do not refer to VAT registration and we...