The practical answer
They are different contractual structures, so when VAT becomes payable can differ; check the actual proposal and tax treatment.
Ask for a payment schedule showing initial cash, instalments and VAT separately. Compare both structures over the same asset price and retention period rather than comparing only a net monthly figure.
Your accountant should confirm the treatment for the business. A cash-flow difference does not mean one structure always produces a lower total tax cost or is suitable for every purchase.
Commercial finance is subject to status, lender approval and the specific asset and transaction. The right structure depends on the complete circumstances of the business.
What should I do next?
Have the asset details, supplier information and an outline of what the business needs ready. DCF can then discuss the requirement and identify which lenders may be suitable.
Read: VAT on asset finance →Explore the relevant guides
Compare HP, finance lease & contract hire — For ownership plans and full end-of-term commitments.