Whilst info is sketchy to say the least at this stage, as it is still being fully digested by veterans organisations, but imposing VAT on Motability AP’s may have some unpleasant and unintended consequences, particularly for the somewhat older veterans in receipt of WPMS on the Motability Scheme.
Basically as it stands with Motability, those on WPMS pay a lower AP, thus in future will pay less VAT. This hasn’t been lost on those in receipt of AFIP – the newer veterans mobility allowance which aligns to PIP etc money wise (nor the Treasury/Motability as I understand it).
I am pretty sure that Motability will concoct a plan and I fear they would very much like to cease with the headache of producing the differential pricing for one set of customers (WPMS) every quarter.
Hence, the AP’s for WPMS customers may ending up rising to match other allowance claimants, with the corresponding circa £9.00 per week being returned to WPMS recipients. This in order to equalise and simplify the VAT situation.
However, apparantly this will have to be a fully manual process as the Veterans_UK payments system cannot cope with this without large investment into what is a creaky old legacy system. The cost of doing this manually, or the upgrade of old IT systems will probably dwarf how much they take in under VAT!
I know Blesma and a few other veterans organisations are on the case!