It shouldn't be an issue and she's a bit of a nob, you don't have to be VAT registered, and it's not really worth the hassle of sole trader or anything like that for a few hundred quid.
If you are not VAT registered they can't claim back the VAT, but that's not illegal or anything, tell them to sort it or stuff it
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 £77,000, 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.
http://www.hmrc.gov.uk/vat/start/register/when-to-register.htmHMRC website everything you need to know about tax
Edit: Also just to add, register for VAT when it's in your benefit not in the benefit of others, if you buy a new camera, you could save yourself 20% by being VAT registered, but you need ot take in to account other expenses such as an accountant or time and effort to do it yourself!