You most definately have my vote on this one!
Paying VAT for your education so that once you qualify and earn over £28,000/year you can pay income tax at a higher rate (40%)stinks! It is a real tragedy that people who aim for their dreams are treated this way. The government want it all their own way - they did the same with IT contractors and the IR35 tax law. They want a mobile work force who can provide highly specialised skills AND they want them to run Limited companies BUT they don't want them to take the perks that ANY Limited company Director is entitled to! They insist on you providing all of the paperwork, articles of association, accountants etc etc but when it comes to the cash they wriggle it out of you with semantics...
Setting up a VAT registered company for flight training could be quite a good idea. The problem comes when you justify your day. They nailed IT contractors by claiming that because they reported to a place of work and were given direction on what to do during their working day, the contractors were technically working for someone else and as such should be taxed at source.
I am sure that eventually the government would concoct some sort of excuse toward flying. But as that would take some time, rather than pay £5250 in VAT on £30000 without re-course in a claim (even a partial one), then it is certainly worth a go!