rotormad,
It really is quite simple. You set up a business as a self-employed helicopter pilot. Since you are a Sole Trader, all this involves is filling in a form telling the VAT people that this is what you are. You are then allowed to claim back VAT on your training costs. If it's your only business (I was self-employed in another capacity anyway, so it didn't quite apply) you MAY be asked for a simple business plan, ie what you're doing and when you might finish training etc - I've heard of this happening to one person. You then keep all your receipts, and claim back the VAT on a simple form every three months. Easy-peasy, and quite legal. I was told the same thing by flying schools, but my accountant asked me to check with the VAT help line. I did, emphasising that I wouldn't be earning for quite a while; they said it was legal, and even gave me the rules and time limits for claiming back VAT already paid (3 years for products, 6 months for services I think - ask them). My accountant still wouldn't believe it, and I nearly changed accountants, but the next time I went to see him he seemed quite happy, so I guess he'd checked it himself. He set it all up for me, but I do it myself now, as it really is very easy.
I believe you live quite close to me. My accountant is in Oswestry, Shropshire, and has been through all this with me already, so he knows about it. If this is convenient for you, and you'd like his phone number, send me a PM or email, and I'll get back to you as soon as I can, which may not be till next weekend as I'm off down to Thruxton again this afternoon.
Good Luck!