There is the perception of credibility if you are registered for Vat.

I too hate the hassle of the Vat returns etc. but I would definitely register for Vat, unless in your specific business the client is unable to claim back the Vat!

If you were far more successful than you expected, you will be liable for the Vat, without the ability to recover the Vat from past invoicing, if you should exceed the threshold for registering for Vat.

So you would have to "close" that business if you got near the threshold and start another business!

Depending on your costs involved, not registering for Vat increases your own costs as you cannot claim reimbursement of Vat incurred by your business.

For interest sake, some U.S. States acknowledge that business is entitled to retain a % of the Vat (at a fixed rate! accross the board) as they are acting as Government agents and have a right to be rewarded for their costs in carrying out the work of a Government Agency!
There is an argument there as very large corporations don't incur the same costs as does small business in relationship to the actual value of the "pay back" %

Yvonne