You are calculating the VAT incorrectly Flint
VAT stands for Value Added Tax, if you as a producer purchase materials to process in your company, you can deduct the VAT that was paid when you purchase your materials.
Meaning that VAT is only calculated on the final sell value to the consumer. Any company in the supply chain only pay VAT from the price increase of the product they add. So if you buy materials for 100, and sell product for 500, you pay (500-100)*1,09 , OR 500*1,09 MINUS 100*1,09, not it addition as you calculate it