[Quacker]

There is a lot of work involved with fitting the Volvo towbar, which meets Volvo safety standards for rear collisions. I suspect that a great deal of the cost is the labour time involved and by the looks of it one man would be pushed to complete the fitment in one working day, even with occasional help to move the bigger bits.
I reckon that £1000 including VAT fitted is quite reasonable really for the electrically deployable genuine hitch and electrics. Compare it to the £3000 asked for a stereo upgrade in value terms.

By the way, if running a VAT registered business and towing for that business, the VAT element should be reclaimed and the rest of the hitch cost offset against income or corporation tax.