Re: Life goes on.
It doesn't matter at all that they don't charge VAT on their services. As long as they are VAT registered (and they will be) then they *can* reclaim VAT on their spends (with some exceptions). If HMRC end up owing them VAT as a result then HMRC will indeed hand over that cash. It also happens if a company manufactures products in the UK (paying VAT on inputs) but sells overseas (so no VAT on those outputs).