# Ending a van lease early > What ending a business contract hire agreement early costs, how the termination charge works, what happens if the business fails, and the alternatives. Source: https://fleetme.co.uk/guides/ending-a-lease-early --- # Ending a van lease early By [the FleetMe team](https://fleetme.co.uk/about) · Updated 14 October 2026 · 11 min read The short answer **You can normally end a business contract hire agreement early, but only by agreement and for a termination charge. There is no statutory right to hand a business vehicle back, so what you can do is whatever your contract says.** ## Why is ending a lease early so expensive? ## Is there a statutory right to end a business vehicle lease early? ## How is an early termination charge worked out? ## Is VAT charged on an early termination payment? ## What are the cheaper alternatives to termination? ## What happens if the business stops trading? ## What happens if you simply stop paying? ## What if the van is written off or stolen? ## How do you avoid ever needing this guide? ## Put a price on it Tell us the vehicle, the term and the annual mileage you need and we come back with a written quote, and we aim to do that the same working day. Rentals are quoted ex VAT with the VAT-inclusive figure alongside, and your agreement is with FleetMe. How many vehicles do you need? Takes a minute. No obligation. ## Enquiry received, one step to go. We can put a guide figure together from what you ve told us. To confirm the vehicle, the monthly rental and a delivery date **in writing**, we need your business details and the underwriting information. Next step · about 5 minutes Complete your business application It s pre-filled from your answers. Nothing is committed until we confirm your quote and you sign. No obligation · About 5 minutes Prefer to leave it there? We ll still be in touch about your enquiry. ## FAQs ### Can you end a business contract hire agreement early? Usually yes, by agreement and for a termination charge, because you are ending a fixed-term contract early. It is not automatic and it is not free, and on some agreements it is not available at all. Ask for the settlement figure in writing before you decide anything. ### How is an early termination charge calculated? By the formula in your agreement. It is commonly expressed as a proportion of the rentals remaining, sometimes with an administration fee and a disposal adjustment. Excess mileage and damage beyond fair wear and tear are assessed on top, exactly as they would be at a normal hand-back. ### Does the Consumer Credit Act let a business hand a leased van back after 18 months? Generally no. The section 101 termination right applies to regulated consumer hire and is disapplied where annual payments exceed £1,500 and where goods are hired for the purposes of the hirer’s business and selected by them. For a company on business contract hire the position is contractual. ### Is VAT charged on an early termination fee? Normally yes. Since Revenue and Customs Brief 2 (2022), adopted from 1 April 2022, fees charged when a customer terminates early are generally treated as further consideration for the supply, so VAT applies. A VAT-registered business recovers it in the usual way, so budget the gross figure. ### What happens to a van lease if my company stops trading? The agreement remains a company liability. The vehicle is returned to its owner and the termination sum becomes a claim in the insolvency. Where a director gave a guarantee, it survives the company and the shortfall follows the individual. Speak to an insolvency practitioner and to us early. ### Can I transfer my lease to another business? Sometimes, by novation, with the owner’s written consent and underwriting of the incoming business. It is never automatic. What is almost always prohibited is informally subletting or lending the vehicle to another business, which breaches the agreement and creates an insurance problem too. ### What if I just stop paying the rentals? The worst outcome. The agreement goes into default, the vehicle is recovered and the full termination sum is claimed with arrears, interest and costs, so you pay the charge anyway, without the ability to negotiate it, and the company’s credit profile is damaged. Call before the first missed payment. ## Next step Business van leasing → How the monthly rental is built, what is included, and who business contract hire is for. Business van leasing eligibility → The honest answer on who gets considered, and what we look at when we assess a business. Or go straight to the range: [browse vans and pickups](https://fleetme.co.uk/vans) · [company cars](https://fleetme.co.uk/cars) ## Related