Pleeaasee what were they thinking ?
You are dealing with the Treasury. This is a direct descendant of the Robber Barons. They only know how to extract your money into their hands. Witness the Child Credit fiasco when they had to do pay out :-)
What were these people thinking ? VAT is something collected by HM Robbers & Cheats. Refunds are only permitted under extreme circumstances; you might have a carousel. Important point to note : - They are NOT registered for VAT; even if with their turnover they should be.
As someone else pointed out 'NOT on the invoice" then no VAT included. Same for dealings with a non-VAT registered company you can't use it on your VAT return.
How could business's be so niave ?