You have to define a Tax 1 Description and a Tax 1 Number in the company details (View | Business Setting | Company/Contact details) and then it will appear on the invoice.
Exemption is related to overseas overs I think so tick it if it is vaild, don't if not - I don't reall understand that but someone else on here will.
If your goods are zero VAT rated then it won't be a problem to show your VAT number if they are not zero rated but you haven't put VAT into the catalog then I think that it is a problem. Again not sure though.
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