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 706 Partial exemption and 706/2 Capital goods scheme).
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.