Assume you want to add a percentage $p\%$ to a given number $x$. What you have denoted by the expression "$x+p\%$" for the final price $y_1$ means the following: $$y_1=x + \frac{p}{100}\cdot x = x\cdot\left(1 + \frac{p}{100}\right)$$
On the same way, "$x-p\%$" gives a different price $y_1$: $$y_2=x - \frac{p}{100}\cdot x = x\cdot\left(1 - \frac{p}{100}\right)$$
Thus, in your particular case, you have to recover $x$ from $y_1$ and, hence, you have to divide that quantity by $1.20$. Note that this is not the same as what you did. You multipled by $0.8$:
`£3.99 / 1.20 = £3.325`
`£3.99 · 0.8 = £3.192`