Pricing & VAT

I am looking into opening a women's clothing shop and trying to do the number-crunching at the moment. I have just been looking at the HMRC website and am totally confused about VAT and coporation tax. The somewhat stupid questions I need answered at this stage are:

1. Do I need to add 17.5% of the total sale price of my products to be re-couped in VAT? I know this sounds obvious but I just can't believe that an item sold for £50 would consist of somewhere around £25 cost price, £8.75 VAT leaving only £16.25 to cover all other overheads and hopefully some profit! Is it 17.5% of the sale price as a whole or just the 'profit' element - ie the £16.25 - of the sale price?

2. Do I have to pay corporation tax? My venture will be relatively small, I imagine turning over around £70k per annum to break even (including paying me a salary) so would this incur corp tax or only the profits made over and above that? In which case, doesn't that create an incentive to just keep increasing your own salary to avoid corporation tax? I suppose that would have repurcussions for the perceived value of the business though...

Thanks

Emily