How to decide if I should be VAT registered

Deciding whether to become VAT registered is ultimately a decision you should make after conducting your own research and having a conversation with your accountant.
That said, given the complexity of filing your VAT paperwork, it is widely regarded as more trouble than it is worth until you are compelled to do so. There are circumstances where some businesses or clients will expect (or even require you to be VAT registered, and where maintaining the illusion of being a larger entity is vital to your companies image, you may consider voluntary registration.
Assuming that is not the case, however, deciding when you should register for VAT is a simple matter of projecting your turnover or inventory value over a twelve month period and seeing if you are above the VAT threshold.
At time of writing, the threshold for turnover in a twelve month period that required VAT registration was £81,000. Similarly, if you will be importing goods for distribution which carry a value above £81,000 you are also required to register for VAT. For all the details, a visit to the HMRC website will provide you with up to date figures, as well as answer some frequently asked questions and guide you through the process. Here's a link to the current page which outlines what entities are capable of being VAT registered, what circumstances might make you exempt, and what the thresholds are for compulsory VAT registration:

http://www.hmrc.gov.uk/vat/start/register/when-to-register.htm

From a simple accounting perspective, there is an argument to be made for VAT registration for cash flow reasons. In the day to day running of your business, being VAT registered will mean you do not pay the VAT on the majority of your business expenses, and you will charge it out on your services to all who must pay it. This means that you will not have to wait until the end of the tax year to recoup the cost of VAT expenses when you file your taxes. In theory this means there is less outgoings and more incoming, which might smooth out the lumpiness of freelance work. However, the additional administration will create a cost of either time or money that could outweigh the benefit. In the realm of sub £80,000 businesses, a line of credit or business credit card will solve a similar problem and involve less work and may even be less costly. A detailed discussion with your accountant should make this a fairly simple calculation.

Some other good resources from HMRC include:
http://www.hmrc.gov.uk/thelibrary/vat/index.htm
http://www.hmrc.gov.uk/vat/forms-rates/rates/rates.htm

As mentioned above, the decision to register for VAT should be made in consultation with a professional. The costs of registering and the ensuing administration, to say nothing of the penalties for NOT registering when you should have, can be significant, so it is important to take the decision carefully.