Details about VAT registration

From HM Customs website

You're doing business in the UK, or intend to start

You may need to register for VAT, or you may be able to choose to register voluntarily, if you are doing any of the following kinds of business in the UK:

• Supplying goods or services within the UK. If your turnover of VAT taxable goods and services supplied within the UK for the previous 12 months is more than the current registration threshold of £73,000, or you expect it to go over that figure in the next 30 days alone, you must register for VAT. However, if your turnover has gone over the registration threshold temporarily then you may be able to apply for exception from registration - see the section later in this guide for more information.
  There is a section later in this guide on calculating your VAT taxable turnover.
• Taking over a VAT-registered business from someone else.You have to add your own VAT taxable turnover over the last 12 months (if any) to that of the business you're taking over. If the total goes over the registration threshold on the day of the takeover (currently £73,000), you'll have to register. However, if your turnover has gone over the registration threshold temporarily then you may be able to apply for exception from registration see the section later in this guide for more information.
• Receiving goods from other countries in the European Union (EU).If you have received goods from other EU countries in the UK (these are known as acquisitions) with a total value greater than £73,000 in the current year since 1 January, or you expect to acquire more than that value in the next 30 days alone, you must register for VAT.
• Supplying goods or services from the UK to other countries. See the section in this guide on supplying goods or services from the UK to other countries.
• Supplying goods or services to the UK from other countries. See the section in this guide on supplying goods or services to the UK from other countries.

The magic number is a turnover of £73,000.  So if in our first year if we were fortunate enough to hit the £100k projected turnover we would have to register for VAT.  Initially we could start trading without being VAT registered which would present us with a distinct advantage on pricing against our competitors.  Also as we would be mainly a Service provider we would not buy a considerable amount to offset as input VAT so there is no advantage to be gained for our type of business being VAT registered.  However if we were to invest in a lot of nwe equipment/desk etc it may be advantageous. Alternatively we could each be self employed free lance graphic designers so then individually we could earn up t £73k without having to register for VAT.