VATLP22580 - Option to tax: input tax and the option to tax: circumstances under which you should consider refusing permission
The permission regime gives HMRC the opportunity to take steps to ensure that a fair and reasonable attribution of input tax will result from the option to tax. As set out in VATLP22560, it may be appropriate to negotiate a special partial exemption method or CGS method in order to achieve this (see notice and ).
You will not usually need to refuse permission. But you should do so if you think a special method is needed and the taxpayer is ultimately either unable or unwilling to agree to one or if permission is applied for as part of a tax avoidance scheme.