Re: Money-go-round
If you exempt anybody from paying vat, so that I don't have to charge them, you increase my admin and as a small business, dealing with the red tape involved in that would be a nightmare.
Simplest thing would be for Government and NHS to work to same vat rules as business, instead of the arcane ones that they do, which would decrease their admin burden to the same as commercial organisation, rather than having to record VAT charged and then record and report on "irrecoverable" VAT.
Get wording wrong on your invoice and you can cost your customer the VAT, which reduces the amount of money they can spend with you as the VAT usually comes out of the same budget pot as your invoice.