You're dealing with partial exemption, and the good news is the standard method is straightforward once you split your costs. First, VAT directly attributable to your taxable consultancy work is reclaimed in full, and VAT directly attributable to the exempt training (course venue hire, training-specific materials) is blocked. Second, 'residual' VAT on general overheads — software, home office costs, accountancy fees — is apportioned by the ratio of taxable turnover to total turnover. So with roughly 80% taxable and 20% exempt turnover, you'd reclaim about 80% of that residual input VAT each quarter.
Third, apply the de minimis test before blocking anything: you can reclaim all your input VAT if the exempt input VAT averages no more than £625 per month (£7,500 per year) AND is no more than half your total input VAT. If it fails, the exempt portion stays blocked. Run this calculation every quarter and put the recoverable figure in Box 4 of your return, then do a longer-period adjustment at the year end. You don't need HMRC's approval to use the standard method, but if the turnover ratio doesn't fairly reflect how you actually use the overheads, you should apply for a special method. Getting the split wrong can mean an assessment, interest and penalties, so keep the working for each period. Given the training is about 20% of turnover, it's also worth checking the workshops genuinely count as exempt education — that classification drives the whole answer.
