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I appreciate that this is a Motability Forum, but I know that a number of contributors have purchased private cars and wondered if anyone can answer a couple of questions about the above scheme? We are considering leaving Motability and buying a used car, as the cars that we are considering are extremely expensive new and I don’t want to spend that much and take a big depreciation hit, but I thought I should consider this scheme as an alternative to buying used. I’ve read the HMRC guidance, but these questions aren’t answered and there’s no contact details to ask questions either, so I’m a bit stuck.
My wife easily meets the two main qualifying criteria, as she is a full time wheelchair user and needs a substantial and permanent adaptation, in that she needs a person hoist which is both bolted to the car and wired in to the cars electrics, so that’s a big tick. My questions are as follows;
1) Does the VAT exemption only apply to the base price of the vehicle, or does it apply to the total vehicle price including options? With the cars that we are considering, we’d want to add quite a few grands worth of options, so it would make a big difference. The guidance makes no mention of this whatsoever.
2) The guidance states that a nominated person can buy the car (my wife no longer has a driving licence as she can no longer drive due to her disability) and it says that lots of questions will be asked, such as who is paying for the car, who will it be registered to etc, but it doesn’t say what their stance is on this. In our case, I would buy the car and it would be in my name. Does anyone who has gone down this route know if that would be deemed acceptable?
Many thanks
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I would buy the car and it would be in my name. Does anyone who has gone down this route know if that would be deemed acceptable?
Without ever having done it, i can tell you immediately that this is never going to happen.
The car would need to be in your wifes name. 100%. It in fact says that you’re purchasing a car on behalf, not “to the benefit of”.
It also says “The vehicle seats no more than 12 people including the driver and must be supplied to a disabled person who normally uses a wheelchair or stretcher to be mobile” (not “available to”).
Otherwise, what’s to stop your son/daughter to buy another car, VAT excempt, with their mom as justification?
The only way around that would be if your wife would be legally prohibited from owning a car, then you’d need to bring evidence of that to the dealership.
“It’s acknowledged that the disabled wheelchair user may not legally be allowed to have a vehicle registered in their name. In this circumstance, we would expect supporting evidence to be provided to the supplier.”
This is referring to being underage, etc. In that case, you could register the car to your name.
Further, in regards to other things VAT – repairs and maintenance would be VAT free after, too.
“The repair or maintenance of an adapted motor vehicle can be zero-rated when the work relates to a vehicle (or an adaptation to a vehicle) that was eligible for zero rating when it was bought or supplied.
If you take the vehicle for repair or maintenance to a third party garage you will need to produce the original purchase invoice for the vehicle or adaptation to confirm that it had previously been supplied at the zero rate.
Suppliers that did not supply the vehicle will need to check the original invoice for the purchase of the vehicle to confirm that it was supplied at the zero rate. You should keep a copy for your records.”
Now, i didn’t see anything about factory fitted options, but as i understand, the taxable amount is the full purchase price of the car. The end price, including all options and adaptations. In which case, the optional extras would be VAT excempt, too.
Prior: SEAT Ateca Xcellence Lux 1.5 TSI DSG MY19, VW Golf GTE PHEV DSG MY23
Current: Hyundai Ioniq 6 Ultimate
Next: we'll see what's available in 2028.hi glosguy,
rene is correct the invoice the dealer would produce would list the vehicle and any additions net and then charge vat on the total @20% for an average customer. so the exemption will apply to the full “invoice price”.
as it would for any servicing and repairs. the vat 1615a and supporting documents would have to support the dealers sale.
i would just make sure you have copies of any and all documents before and after the sale. if your prepared to wait you could ring the vat support line but be aware there are long queues. i work for a firm of accountants and i spent 3 hours this morning in various hmrc queues lol.
i will ask our vat partner what he knows about this tommorrow let you know in the pm.
you would be able to purchase in your name subject to additional info being suupplied as below.
hmrc would not expect a married couple to have 2 cars one for use with the disabled party and one for use when the nondisabled partner needs to go somewhere.
the guidence notes are as follows.
taken from HMRC guidence notes:
3.4 Individuals that may purchase an adapted vehicle on behalf of a disabled wheelchair user
HMRC acknowledges that in some circumstances a disabled wheelchair user may be unable to purchase or drive a motor vehicle themselves, although the sale of an adapted vehicle to a person connected to them would directly benefit the disabled wheelchair user’s mobility. Provided that the purchase is primarily for the domestic or personal use of the disabled wheelchair user rather than the personal use of the connected person and that all the qualifying conditions are met, zero rating can be allowed.Where an individual has been nominated by a disabled wheelchair user to be their representative to purchase a vehicle on their behalf, we would expect that the individual has a close relationship to the wheelchair user (for example, parent, son, daughter or carer) and that they live within a reasonable distance of the wheelchair user’s home. Such factors help support the position that the vehicle is for the wheelchair user’s personal and domestic use.
Adaptations to the motor vehicle must be permanent and substantial and be designed to meet the specific needs of the disabled wheelchair user, to enable them to travel in it, by entering the vehicle or to enter and drive it. If only minor changes to the vehicle are needed for the disabled person to enter or enter and drive it, then the purchase of the car will not qualify for zero rating although the adaptations may. See guidance at section 10.
If you’re purchasing the vehicle on behalf of a disabled wheelchair user, the supplier may need additional information and evidence, such as:
who’s paying for the adapted vehicle
who will own the adapted vehicle
who’s the registered keeper of the adapted vehicle
does the family member or carer have another vehicle for their use
where will the adapted vehicle be kept
who will use the adapted vehicle
what will the adapted vehicle be used for
how often will the disabled wheelchair user use the adapted vehicle
It’s acknowledged that the disabled wheelchair user may not legally be allowed to have a vehicle registered in their name. In this circumstance, we would expect supporting evidence to be provided to the supplierMany thanks. I had originally assumed that the car would need to be bought in my wife’s name, but judging by the questions in the guidance this didn’t seem to be a given, hence my question. I wonder if they would accept eligibility if the car was registered in my wife’s name but purchased with my money?
This poses another question, although I think I know the answer. We have intentionally kept all my savings in my sole name, which has paid off as my wife has just had a financial assessment for care costs for the first time, and they only take into account savings in her sole name, or jointly (which we don’t have), so all my savings weren’t taken into consideration. If we bought an expensive car in her name, that’s a major asset, but the assessment only takes into account income (her private pension plus some of the daily living component of PIP – she doesn’t have a state pension yet) and savings & investments. There were no questions on possessions or cars, and because I would have paid for the car out of my money (not hers) it couldn’t count as a ‘deprivation of assets’ (where people buy something expensive, or give money away, in order to reduce their savings to meet the care costs threshold).
Rather than spend hours on hold to HMRC, I might go to the dealership and speak to someone who deals with these exemptions, as the onus is on the dealership to administer it so they’d have to know what is allowed and what isn’t, as they have to exempt the purchase from VAT (you don’t pay it and claim it back).
Great news if the optional extras are also VAT exempted (which begs the question why we pay the full cost of options on VAT exempt Motability cars 🤔) and it was news to me (until I read the guidance) that servicing and maintenance costs as also VAT exempt (I’d only use the supplying main dealer for this).
I think it’s still going to work out at much more than I’d be happy to pay, but I would kick myself if I didn’t research this option thoroughly before discounting it, rather than finding out all about it afterwards!
edit: in response to mitchs 2nd post
That refers to purchase and usage – not registration. They make that clear in the last paragraph that you forgot to quote, where it says (under 3.4)
“It’s acknowledged that the disabled wheelchair user may not legally be allowed to have a vehicle registered in their name. In this circumstance, we would expect supporting evidence to be provided to the supplier.”
Under normal circumstances (ie, his wife isn’t underage or otherwise legally unable to register a car), the car has to be in the wifes name. Only if the disabled wheelchair user isn’t able to register the car in their name due to legal circumstances, is someone else (given sufficient evidence) able to.
Prior: SEAT Ateca Xcellence Lux 1.5 TSI DSG MY19, VW Golf GTE PHEV DSG MY23
Current: Hyundai Ioniq 6 Ultimate
Next: we'll see what's available in 2028., although the sale of an adapted vehicle to a person connected to them would directly benefit the disabled wheelchair user’s mobility. Provided that the purchase is primarily for the domestic or personal use of the disabled wheelchair user rather than the personal use of the connected person and that all the qualifying conditions are met, zero rating can be allowed.
thats the bit that says you can buy the car.
the fact you are a couple and your wife would be the main beneficary of an adapted car enables it. all you would need to do is give the garage the extra info that is listed.
whilst the onus is on the dealer to keep and maintain records and documentation. i would strongly reccomend you get and keep copies yourself esp as you will need it for vat free servicing and repairs which suprised me.
I wonder if they would accept eligibility if the car was registered in my wife’s name but purchased with my money?
Why wouldn’t they?
I don’t think they’d give a rats behind who pays for the car, as long as it is in her name. Even less so if it’s the spouse paying. She could’ve borrowed the money off of you – let them try to prove otherwise lol.
Great news if the optional extras are also VAT exempted (which begs the question why we pay the full cost of options on VAT exempt Motability cars 🤔) and it was news to me (until I read the guidance) that servicing and maintenance costs as also VAT exempt (I’d only use the supplying main dealer for this).
Some options are VAT exempt for MB cars, assuming they’re “requirements” (like, as an example, heated seats/steering wheel for someone with Reynards).
That said, they same though occured to me a few minutes ago as well when i was reading through the guidelines.
Now, here’s where i have to throw my hands in the air: i don’t know if the car would count as an asset to any of your wifes assessments or audits, or if there would be negative repercussions due to that.
The only thing i’m certain about is that the car would have to be registered in her name.
Prior: SEAT Ateca Xcellence Lux 1.5 TSI DSG MY19, VW Golf GTE PHEV DSG MY23
Current: Hyundai Ioniq 6 Ultimate
Next: we'll see what's available in 2028.@mitch I posted the above before seeing your last post. That’s the section that confused me. If the car has to be purchased in the disabled persons name then why ask all those questions as they would be irrelevant? It rather implies to me that it doesn’t have to be. If the only exemption was children, or adults who legally couldn’t drive, it would be far easier just to say that – but they don’t. I have a great contact at our local BMW dealership. Not sure if they personally deal with VAT exemptions but they can hopefully let me know what they’ve done before. I don’t mind having the car in my wife’s name if that’s the only option (and it doesn’t cause an issue with claiming for care costs) but given a free choice I’d rather have it in my name.
thats the bit that says you can buy the car.
I never said you can’t.
This is legal guidelines, you need to differentiate between purchase, usage and registration. They do, in fact, too – as clearly shown by the last paragraph under 3.4 where they specifically talk about registration, not purchase. When they speak specifically about registration, they quite clearly state that there needs to be a legal reason as to why the disabled person wouldn’t be able to register the car. Again, this would be open to abuse otherwise.
That just means that an appointee can go and buy the car. It still has to be registered to you (or, his wife, in that case).
Prior: SEAT Ateca Xcellence Lux 1.5 TSI DSG MY19, VW Golf GTE PHEV DSG MY23
Current: Hyundai Ioniq 6 Ultimate
Next: we'll see what's available in 2028.oh i dont disagree, its like motability they own the car but we are the registered keeper.
hence we get the fines etc.
his wife would be registered with dvla but he is the purchaser which will make a difference with the means assessments by the council etc.
its his money hes “wasting” not his wife dumping savings to avoid paying or contributing for care lol.
If the car has to be purchased in the disabled persons name then why ask all those questions as they would be irrelevant? It rather implies to me that it doesn’t have to be. If the only exemption was children, or adults who legally couldn’t drive, it would be far easier just to say that – but they don’t. I have a great contact at our local BMW dealership.
Because purchasing and registering are two different things.
I’ll say, the general paragraph is awfully structured and kind of open for interpretation, but the last paragraph is spelled out clearly. It says that there’s just one reason for someone other than the disabled person being the keeper of the car, and that’s “legal reasons”.
Of course, regardless of anything, you certainly should talk to your dealer.
As a sidenote, there are other legal reasons as to why you may not be able to register a car, other than being a child.
Now.. They could have of course simplified that massively by differentiating clearly between keeper, driver, appointee, carer etc – but here’s how i interpret the paragraph in question.
“If you’re purchasing the vehicle on behalf of a disabled wheelchair user, the supplier may need additional information and evidence, such as:
who’s paying for the adapted vehicle
who will own the adapted vehicle
who’s the registered keeper of the adapted vehicle
does the family member or carer have another vehicle for their use
where will the adapted vehicle be kept
who will use the adapted vehicle
what will the adapted vehicle be used for
how often will the disabled wheelchair user use the adapted vehicle”The additional information “may be needed”. The part where it asked “who is the registered keeper of the adapted vehicle” will come into play if his wife legally wouldn’t be able to. These aren’t general questions, these are questions that may come up under certain circumstances.
edit:
his wife would be registered with dvla but he is the purchaser which will make a difference with the means assessments by the council etc.
That one’s above my paygrade, i wouldn’t be able to (nor wanting to) give financial advice.
Prior: SEAT Ateca Xcellence Lux 1.5 TSI DSG MY19, VW Golf GTE PHEV DSG MY23
Current: Hyundai Ioniq 6 Ultimate
Next: we'll see what's available in 2028.I note you said buying a ‘used’ vehicle, I went to do this many years ago so things may have changed but it wasn’t as worthwhile as I’d hoped.
For example a new £50k vehicle that’s VAT exempt costs you £41,667 so saving £8,333 (approx!)
A used vehicle that costs £50k you only get VAT relief on the dealers profit margin. So if the dealer paid £48k for the vehicle then he clears £2k, he then deducts reasonable expenses… rates, wages etc so he ends up with a profit of £1k that he has to pay VAT on, which is about £833 That is how much you’d save.
Now mines was over a decade ago and all those figures are just estimates to give an example so obviously speak to an expert but as far as I remember your wife could buy the car and be the owner while you’d be the registered keeper (like Motability & us) or she could immediately sell it to you? You can only get VAT relief once every 3 years to prevent the previous abuse & fraud that occurred.
Good luck 🤞
typical hmrc really leave it slightly ambiguous so they can swoop in and say ah but, and we want the money back lol. thats why so much stuff ends up going to court for a definative answer.
it does leave open the option for a close relative to buy and register a car in their name otherwise why ask for the additional info. but also would you if your not disabled have to pay the road fund. etc.
as ever as clear as mud. keep us informed if you get better info from the dealer glosguy its an interesting one.
@Rhodgie I was only looking at VAT exemption for a new car. If I go down the used route, I would just be buying it normally (at whatever discount I can negotiate).
@mitch You raise an important point that I’d completely overlooked – road tax. The car would incur the luxury car supplement for 5 years (quite a few grand) which my wife would be exempt from (as she would all road tax, for that matter) so regardless of the ambiguity of the HMRC guidance, we’d need to make sure that we do what is needed for that to occur, so I guess that means her having to be the owner, or keeper – or both – not sure. Another complication 😂I went through this and the price was 28k for mine plus extras of 6k so total price was 34k but would of cost 44k if no vat etc back in 2015. was lots of forms to sort out but nothing too difficult, doctors note, vat forms etc
I went through this and the price was 28k for mine plus extras of 6k so total price was 34k but would of cost 44k if no vat etc back in 2015. was lots of forms to sort out but nothing too difficult, doctors note, vat forms etc
Thanks. Did you get the VAT deducted off the £6k extras as well as the base price? I’m a bit confused by the maths, as a £34k car inc extras would be £40.8k inc VAT (£34k + 20%). It’s getting late and my brain is slowing down!
HMRC are great for two things, paperwork for no apparent reason and ambiguity. It’s in absolutely no doubt you’ll have paperwork to deal with for just about everything they can potentially require. Unfortunately you need someone who has dealt with this specific matter on multiple occasions as expertise in VAT exemptions comes from trying and succeeding AND failing and learning what consistently works and what doesn’t. Anyone can read and try to interpret the wording, even an expert in HMRC language could come up with a relatively decent guide but that’s no guarantee.
That’s a lot of words for ‘if you haven’t done it successfully, repetitively, then it’s an educated guess”. Some may be able to tell you what worked for them but you may have complexities, especially trying to separate your funds from the grabbing b&st&rds that’ll happily take all your savings for care. If the dealership can’t help, maybe there’s someone within Motability who could advise or it’s that long wait on the HMRC phone.
I'm Autistic, if I say something you find offensive, please let me know, I can guarantee it was unintentional.
I'll try to give my honest opinion but am always open to learning.Mark
The car was an m235i and purchase price totalled 44k as i also got mperf parts like exhaust black grills etc on top of the regular options memory seats etc. saved 10k all in
The car was an m235i and purchase price totalled 44k as i also got mperf parts like exhaust black grills etc on top of the regular options memory seats etc. saved 10k all in
I bet that was a lovely car to drive. I’ve had dozens of BMWs, but never had an M car. I absolutely loved all the various 5 Series I had (520d, 525i 3.0 and 530d) and a mate of mine (who was very senior in the motor trade and likes his cars) says I should consider an M5, but the potential running costs if something goes bang worries me a bit 😂
GlosGuy As you would not be paying PIP Mobility to Motability, just watch the council do not count her pip mobility component as income or savings towards her care package charges.
Thankfully, they disregard the Mobility component of PIP when it comes to income, even if you take it as cash and don’t have a Motability car. That was very clear in all the guidance notes, and the financial assessment result that we had back confirmed it. We were also surprised that they disregarded a proportion of the daily living component as well, as that hadn’t been mentioned. I haven’t checked the maths, but suspect it’s the extra amount for the higher level award that they disregard. Thankfully, they also allowed all of the countless disability related expenses that I articulated, so much so that in total they offset the private pension income that my wife has above the minimum income guarantee. It took me half a day to complete the financial assessment thoroughly, along with several phone calls with the person at the council who was assessing it, and we got a great result that my wife was delighted with!
UPDATE – I have just spoken to an extremely helpful person at HMRC and managed to get definitive answers to my questions, which they are also putting in writing for me. As an aside, you have to call via the specific HMRC Charities Helpline and there is eventually an option for private individuals enquiring about VAT relief on new cars. Answers as follows;
1) Although my wife is the disabled person, can I buy the car with my money? – answer YES.
2) As my wife cannot drive (due to her disability), can I be the registered keeper? – answer NO. My wife has to be the registered keeper and I would be the nominated driver.
3) As I am the only driver and we therefore only need one car, is it acceptable for me to use the car on my own, for purposes that are of no direct benefit to my wife? – answer YES.
This last one was a pleasant surprise, as the guidance rather implies otherwise, but she said that the principle is that the car is permanently adapted so that on the occasions that my wife needs to use it she can but, as the nominated driver, I can use the car for my own purposes. I pressed her about scenarios such as visiting family and friends, day trips etc all of which could be on my own and without my wife, and she confirmed that all such journeys are absolutely fine. This now explains why I got exactly the same answer when I asked Motability all these questions when we retired (and went down to one car). The answers that Motability gave me are therefore in line with HMRC guidance. So, in summary, I could use the car for whatever purpose that I like and need not worry.
She stressed that you must make sure that the dealer applies the VAT exemption at source as it cannot be refunded if applied in error. She also said that dealers are not obliged to partake in the VAT exemption scheme and some Mercedes and BMW dealers are refusing to do so, trying to push people into Motability cars instead (she didn’t say, but I wonder if that’s to try to get their EV targets up?). As I would be looking at a car that was way above what is available on Motability hopefully I wouldn’t have this issue, but I’d need to check first. Thankfully I have a great contact at our local BMW dealers.
Good to have it from authority – also good that i didn’t get it wrong.
Though not quite sure why dealerships would be refusing VAT exemption, it’s of no loss to them. I also don’t think it’s to push into EV, since if that was the case, both BMW and Merc would offer more than a measly single EV option on the scheme.
I don’t think you’re going to have an issue with that problem – and if so, just go to the next dealership. Good service is worth taking a drive for, imho.
Prior: SEAT Ateca Xcellence Lux 1.5 TSI DSG MY19, VW Golf GTE PHEV DSG MY23
Current: Hyundai Ioniq 6 Ultimate
Next: we'll see what's available in 2028.Hi Glos Guy
I think I’m too long in the tooth now to leave MB but something that put me off going the private way back when (apart from finance) was the adaptions.
In my case they are a steering wheel spinner plus remote controls for controlling the car and also would have been a hoist.
In your case your wife is using a wheelchair but unfortunate for myself back 17 years when it would have been worth my while going private I got the impression that mobility scooters are not considered by HMRC to be mobility devices, I assume because there’s many abled bodied folk who use these to help with walking and not help with a disability. If I remember right mobility scooters and hoist are not as they say, considerable adaptions in the eye’s of the taxman.
I assume that’s because these type of adaptions are easy to removed restoring it to a normal car unlike a WAV type vehicle that is actually altered.
Out of interest what’s your view on this, though of course the rules might have changed a bit since 2008.
@ChrisK The rules on scooters are the same. They don’t (in themselves) qualify the user to buy a VAT free car.
The only adaptation we have is a person hoist and that qualifies as it’s bolted in and connected to the cars electrics. I’ve spoken to an adaptations specialist and, once removed, a new buyer would be hard pressed to know that the car had anything. There would just be two small holes in the carpet and anything else is way under the glovebox so out of sight.
The lady that I spoke to could not have been more helpful. It’s worth anyone considering this route to call them and put their mind at ease, as I did re the personal use (not for my wife’s benefit) issue.
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