@ashleykaryl whilst your VAT experienced and not wishing to add too much too debate the topic is about PSD2 compliance. VAT is another whole ball game - however as I am sure you know that you do not have to be over the limit to register for VAT and even in Europe if you do not have a VAT number you get charged for VAT. Input v output offers a modicum of balance to how much VAT you pay.
I have a niche product that I sell with VAT although VAT exemption certificates are also accepted too. It does not affect my sales. Otherwise I would not buy any product I wanted including my daily coffee.
Cheers Paul