Exempt supplies — registration and input tax

An accountancy firm advises a new client who provides only private healthcare services supplied in the UK that are exempt supplies for VAT purposes. In its first year the client expects taxable turnover of nil and exempt turnover of £400,000. The client buys office equipment and pays VAT of £8,000 on those purchases. The client's owner asks whether the business must register for VAT and whether it can recover the £8,000 of VAT it has paid. Which of the following best states the position?