We don't include any VAT in our pricing as we're not a European based company. The advantage of putting your VAT id in the field is that it will then show up on your invoice that is generated.
I'm not sure why the VAT Id isn't being recognized, but I wouldn't worry about it and just enter it anyways. That way, you'll have the proper invoice information created, which is what really matters.
I hope that helps,
Alex