Welcome to WebmasterWorld Guest from 220.127.116.11
eg. i am in a similar situation, i pay special scheme vat at a flat rate of turnover with no claiming back of vat.
when i was negotiating with rackspace uk, they told me it was impossible and that i would have to pay vat even if the server was in the us (which is what i wanted)
however i managed to get to talk to a US rep and did the deal with rackspace usa and bingo, billed in us dollars from america and NO VAT, which is a heck of a saving, the sales rep in USA said no problem! [my accountant also ok'd it]