A VAT-inclusive price is (100% + rate) of the net price, so net = gross ÷ (1 + rate). The correct answer is £160.00. Traps to avoid: £230.40 comes from the "added again" error; £38.40 comes from the "gave the vat 20pct" error; £32.00 comes from the "gave the vat" error; £153.60 comes from the "took 20pct off" error.