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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.
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