I'm fairly sure (but please don't fire 8mm canon at me if I'm wrong) that the test fee is recommended to be a matter between the Examiner and the student direct. It's certainly my experience that every Examiner I've known does it this way, invariably unregistered for VAT. I've only ever heard of one school charging VAT on a test fee for PPL but I think their Examiner was employed by them and on a salary.