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What is VAT?

What is VAT? Here are some definitions.

Noun
  1. (taxation) Initialism of value added tax.
  2. Initialism of Vigilance awareness training.
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Examples
Government taxes on fuel, excluding VAT, accounted for over 1.8bn collected in 2004 with just over half this figure derived from taxes on petrol.
The airline industry is unique in the transport sector in that it pays no VAT and its fuel remains untaxed.
And scrappage has been at least revenue-neutral for the Government, which cashed in on the flow of VAT paid on new cars.
There is also a separate dispute over how VAT should be calculated in scrappage transactions.
They want to know my outgoings, my fixed costs, my capital outlay, my VAT number, my date of incorporation.
Why is there no VAT on designer-label shoes worn by the children of the rich?

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