As a Chartered Accountant, I am not happy with some of the advice given on this page as it conflicts with my current knowledge and, until I have done further research, I wouldn't be prepared to comment.
However, the VAT registration is form is downloadable from the internet and is a relatively simply form to complete but you must have some plan as to expected turnover, costs and timescales. HM Customs and Excise are usually helpful these days and can give you much of the advice you require. Don't be afraid to ask them. Also, the decision as to whether you qualify can rest with an individual inspector so if you are unsuccessful, you can appeal.
HM Customs and Excise are a very powerful body (more so than the police!) and yes, they do have a mechanism for getting it back - they demand it back.
Cheers
Whirlygig