Readers’ forum: Numbers up

I act for a limited company which owns a number of properties that are rented out both commercial and residential. The company has been VAT registered for many years. On 31 March the company sold its only property for which an option to tax election was in place. This meant that it should have deregistered on that date because it was no longer making taxable supplies all other rental income being exempt from VAT. However it decided to keep the VAT number active and there now appears to be a problem with input tax on our fees for the September VAT return.

In the past the company has claimed 50% input tax on our fees (residual input tax) based on the standard method of partial exemption; in other words taxable rental income divided by taxable plus exempt rental income (T/T...