I am not so sure about them charging interest or even a penalty unless you have been careless or deceptive. In the case of simply ceasing to trade, you only have to repay the vat that you have claimed for items still in the business at the date of closure. So, a shopkeeper will have to pay back vat on their unsold stock. A pilot may have no unsol stock but he may have a helicopter or share, a van, sundries etc and a vat calculation may be required proportionally. The question is whether the training that has maybe had £15-£20,000 of vat refunded, still remains 'unsold' and then has to be paid back? Or, if the pilot has invoiced £100,000 of work over say 6 years, he will have repaid the revenue back £20,000. So, at what point does the vat not require to be repaid, if at all?
I would say though, who cares if after spending £100,000 on training and then getting a full time job flying, would anybody care that they might have to repay the vat man?
So anyway, is vat refundable on modular training?