If you register for vat and go on the flat rate scheme you charge 20% and only have to pay 14.5% to the vat man. If you charge £50 an hour, you get an extra £110 a week for simply being registered. Also, it makes you look like youre big enough that you need to be vat regged.
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.
Also you get an extra 1% in your first year.