From my experience with a new vehicle purchase, it’s fairly straight foward process.
Once you have found a suitable and arranged a price, the dealer will need to complete the VAT exemption form and will require your detials etc and the 20% reduction will be taken from the agreed purchase price.
We even managed to get the VAT exemption back dated on one vehicle we had already purchased, in that instance the finance company altered the monthly payments.
As the supplying dealer is claiming the VAT exeption, there is no VAT etc to pay when you sell or trade the vehicle.