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The reason it's called "value added tax" is that a seller only pays tax on the value that they "add" to the product.
Eg, if you buy a widget wholesale for £1000, and resell it for £1500, you only pay VAT on the £500 that you are "adding" to the value, hence the name.
Our VAT rates may seem high to you, but if you look at the total burden of direct and indirect taxation, plus the stuff that we get out of our taxes that you have to pay insurance premiums for, it all works out pretty much the same. We just do things in different ways.
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