I mean you can't dislike it that much!
For many contractors that is one of the many reasons (my number 1 reason, alongside the money tbh)
Is that the only reason? Why now? Why have you waited? Has something changed that you suddenly need more money? Getting divorced? Realised...
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I am a little confused with the way you have worded this.
They aren't exempt from paying VAT on services, they've just misread your quote, or your formatting of it (in a footer?) was so bad, it misled them.
Whenever I quote, I write it as £X +VAT so there is no confusion....
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