> Yes sorry VAT (i called it sales tax for US readers to relate) Sales tax and VAT are different. http://en.wikipedia.org/wiki/Value_added_tax#Comparison_with_

> Yes sorry VAT (i called it sales tax for US readers to relate) Sales tax and VAT are different. http://en.wikipedia.org/wiki/Value_added_tax#Comparison_with_sales_tax http://en.wikipedia.org/wiki/Value_added_tax#Comparison_with... VAT only taxes the value added to goods by an entity, so if they buy parts for £10, make a widget from those parts, and sell a widget for £20, they pay VAT on £10, with the assumption that they entity that sold them £10 of parts paid VAT on the rest of it. There are also possibilities for running costs (such as purchasing a screwdriver to assemble the widget) that are not taxed, because they are not sold on to the public. Sales tax is repeatable, so tax may be paid for a particular good each time it passes hands. Yes, there are exceptions.