Quoting Stroller <..hidden..>:
Not all UK businesses are VAT registered, however. VAT is the equivalent, I think, of US sales tax, and one is only obliged to be VAT registered if one has a turn over in excess of (approximately) $100,000 per year. The accounting and reporting requirements for non-VAT-registered businesses are - in general - much less strict.
£75,000 is the mandatory registration threshold here, I think. You're right, of course, which makes it more sensible for this sort of enforcement to go into a compliance module rather than the core.
R