As far as flying an N reg in the UK goes: I presume ICAO rules would apply
On VAT: I guess you would reclaim European VAT when exporting the aircraft and pay UK VAT on the importation, assuming that VAT still applies to used aircraft as is currently the case. Lots of productive work for even more civil servants
Of course, that assumes that the idiots running the process don’t come up with something even dafter....
