It does leave me out of pocket by about £240 as I won't get a penny in finance commission (my clawback is 6 months actually) but if someone is dead set on receiving a bit of discount they can probably negotiate it on my desk rather than go through the hoops of getting car finance, then cancelling. The £60 difference is VAT saving.
"HMRC has explained the treatment of dealer deposit contributions (DDCs) when motor dealers contribute towards the deposit payable to the finance company, leaving the customer to pay a reduced amount. It considers these arrangements are a discount on the headline price charged by the dealer, with VAT due on the discounted amount charged, not on the full asking price"
The HMRC brief on the clarification gives an example: ‘The headline price of a car is stated as £28,000, this is shown as being funded by £20,000 finance, a deposit of £6,000 from the customer and a DDC of £2,000. HMRC views the selling price from which VAT is due as £26,000 (£28,000 headline price less the £2,000 discount/contribution from the dealer).’
Businesses that have accounted for VAT on the headline price should correct the position either by making a claim for overpaid output tax, or by amending their VAT return."