There are 2 types of lease, a finance lease where you own the asset and an operating lease where you hire and return at the end. A finance lease is mostly a balance sheet transaction, you claim the asset and VAT as and when you took out the finance and the finance becomes a loan. The repayments are then split with the capital element of the repayment going to the loan and the interest to an interest cost on the profit & loss account. If it is an operating lease then the payments go direct to the profit & loss account as a lease and the VAT claimed on the payments made.
