I want to order some stuff from a Dutch website however they add VAT onto the order are they allowed to do this? and if I pay the VAT does it mean that I don't have to worry about the value of the order and won't get hit by Customs Duty?
I believe than in the EU they can charge VAT but not custom duty. For items from the outside the EU, we will not pay any VAT equivalent but are subject to import duty.
If I remember correctly, assuming the item you are buying is subject to VAT in the country of origin and the supplier is registered for VAT, then the supplier has no choice but to charge you VAT. You have to pay the VAT. If you are registered for VAT you can reclaim this back (if this is the case the invoice from your supplier must clearly state both their VAT number & your VAT number and their 2-letter EC country code)