Base your VAt decision on 2 things:
accountants advice
amount of business costs with VAT.
As mentioned, if you supply to consumers, not as much as an issue, but if trade, I would say a must.
re ltd status, it does involve more paperwork and compliance issues, and, potentially, a different tax structure, however, it gives a greater protection to the shareholders if things go wrong.
__________________
Dragons Den advice, without the cost .
Experienced in: Product & Brand Development, Marketing & PR, Small Business Development