20% and 14.5% are not comparable percentages here: You charge 20% VAT but then you pay 14.5% of the 120% total (i.e. 17.4%). This may be a good deal if you ha

20% and 14.5% are not comparable percentages here: You charge 20% VAT but then you pay 14.5% of the 120% total (i.e. 17.4%). This may be a good deal if you have relatively few VATable expeneses, and you are charging customers who are insensitive to VAT (you are paying their VAT for them). At best, you're making £52pw rather than £110pw.