Cancelling personal car lease agreement early - should I be charged VAT? | Ask Honest John

What is life like with your car? Let us know and win £500 in John Lewis vouchers | No thanks

Cancelling personal car lease agreement early - should I be charged VAT?

I am cancelling my personal car lease agreement early. I have been told that I am being charged 50% of the outstanding rentals + VAT on that amount. Should I really be charged VAT on a service that I am cancelling?

Asked on 6 November 2012 by James George

Answered by Honest John

Yes. VAT is due on any payment that it applies to, even if it's a cancellation charge.

Tags: selling lease cars

Similar questions

Should I keep my leased Saab 9-3 or swap it for something else?

My 57-reg Saab 9-3 is coming to the end of my lease agreement. It has 33,000 miles on the clock, with no major problems encountered so far. On completion of the lease, I can either give it back, take out...

My lease car is faulty - but no one will take responsibility?

I took out a contract lease on a new Ford Ranger. The vehicle broke down on delivery due to a variety of warning lights on the dash and was taken back to ford, in November 2016, since then I have personally...