Hello, I'm Keith and happy to help you with your question.
The company normally does not trade save to manage the three flats, a very common arrangement in England, but quite un-necessary in Scotland (he says. who was brought up in England and now lives in Scotland). Only very large organisations charge VAT on rents as firstly people won't pay them and secondly when they come to sell they must charge VAT on the selling price and the extra 20% to persons not registered is a trifle off putting!
Companies are no different to individuals in the application of VAT. Any improvements purchased will almost certainly have VAT added to the bills and this must be paid and cannot normally be reclaimed (see above as to why most of your type of company do not register). The whole costs of the improvements eg extensions, double glazing, installation of central heating, but not maintenance, including the VAT, will be added to the acquisition price inflating it however when calculating the CGT due on the ultimate sale of the property. Of course any improvements made by the company would have to be reimbursed from the individual leaseholders to keep the company tax neutral at the year end.
Always bear in mind Benjamin Franklin's dictum that in life there are but two certainties, death and taxes. This VAT simply cannot be wriggled out of, I am so sorry to have to rain on your parade, but it simply will not work.