VAT is the tax payable on all goods and services in the UK, rated as 20% since 4 January 2010.
On shop-bought goods the tax is included so you do not need to add it to the price displayed. If a bottle of water is priced at 75p then 75p is what you will pay the shopkeeper.
For larger, more expensive purchases you may see the breakdown of goods/service price, then the VAT price, then the total payable.
Find out more from DirectGov - the official UK government website for citizens.