Wait what now? As EJ says, VAT is only on the added value as the name implies - there's no double taxation. There's a reason why all business pricing and contracts pretty much always are prices excl. VAT, because VAT doesn't matter to businesses until the final product (cash flow issues aside, I suppose, since it has to be paid first - you can keep whatever you collect first too, though, so I think that's only an issue if you have long times between buying supplies and selling your product).