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Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.
Yes, the company can, but remember that when the painting is sold at some future, indeterminate time, the organisation will have to charge VAT to the buyer.
I do hope that I have been able to shed some light on this matter.
I would certainly advocate that approach that in the long term sale is anticipated.
HMRC's argument would not survive sustained comment. Were the company, for example, to buy a building upon which VAT had been charged, then that input tax would be reclaimable.
VAT inspections these days are exceedingly rare.
Thank you for your support.