From the Direct.gov site:
MOT test fees : Directgov - Motoring
MOTs are not subject to VAT - however VAT could be charged if it is part of a "service" that the garage in question doesn't actually test the vehicles themselves but sub-contracts the test to another garage (where VAT appears to be paid on the total service charge) - that way it gets very complicated. If, however, the garage in question carried out the test themselves then no, they shouldn't be charging you VAT on the test and you should bring this up with them (refer them to the Direct.gov site which is a government run website) though they may just up their prices to the maximum if they want to be awkward (legal maximum charge for a normal car is £54.85).
As for the failure report I'd insist on seeing it personally. If they can't provide it then ask why not. If they downright refuse to provide a report or explain why not then insinuate you'll be referring the matter to Trading Standards (be prepared to NEVER use this garage again lol).
If the work was carried out (i.e. there are physically new parts on there) then that's at least something; even if the work wasn't necessarily required then new brakes are still good brakes lol.
But yes, they were wrong to charge VAT on the MOT (this may have been an oversight and they just automatically add VAT to the total at the end and should be pointed out to them as they're probably fleecing LOTS of customers every year that only actually benefits the taxman) and they SHOULD have provided a failure notice (this may always have just been laziness on their part rather than just fraudulent but it still needs to be addressed).
So bottom line is go in there with questions, not accusations, and don't pick a fight - if they are clearly fobbing you off then just inform them you will be reporting them to Trading Standards and leave without another word, be prepared for a desperate manager to chase after you so walk slowly haha.
Also make a mental note of the names of the guys you speak to and write this down along with any other notes of what was said for future reference - this will help TS with their investigation (if any).