I have resurrected this thread as there have been some important updates and, most importantly, I need to make a correction to information posted earlier in the thread, when I said that the disabled person has to be the registered keeper. They don’t, but I’ll expand shortly.
I have commenced discussions with my local BMW dealer about a possible VAT exempt new vehicle purchased. I mentioned that the car would have to be registered in my wife’s name (I am the sole driver, but my wife is the disabled person) and their reply was that they didn’t think that this was correct and the car could be registered in my name but still qualify for VAT exemption as I am the nominated driver. I thought that I’d best call HMRC Charities Helpline again (the HMRC department that deals with VAT exemption for disabled vehicles) and I spoke to them this morning.
HMRC have now confirmed to me that I can buy the car and be the registered keeper (as the dealer had said) and all I have to do is complete the simple 2 page exemption form stating that my wife meets the VAT exemption criteria (she does) and that the car will be used mostly for her benefit (as stated earlier in the thread, it’s not exclusively as some people think). I already have it in writing from HMRC that I can also use the car for my sole purposes, and not always for my wife’s benefit.
Having clarified that aspect, I thought that I’d better call DVLA to check if registering the car in my name would cause a problem with the VED (Road tax) exemption, which my wife is entitled to (as is everyone who is entitled to a Motability car). Thankfully, that’s not a problem either. As with HMRC, they are happy that we can still claim the VED exemption, as it is the car that will be used by my wife when needed and I am her nominated driver. They also confirmed that the VED exemption also applies to the ‘over £40k luxury car surcharge’ of £425 for years 2 to 6 and (most significantly) the first year rate which, in the case of one car we are considering, is £5,490 😱
Finally, although HMRC had previously warned me that some BMW and Mercedes dealers were refusing to do VAT exemptions, my contact at BMW couldn’t have been more helpful and said that it’s no issue for them. They also confirmed that the VAT exemption applies to the base price plus all optional extras, future servicing and maintenance and they will even reduce the delivery and on the road charges to match what they charge Motability. Test drives are booked!
I thought that I’d share this important update, as I know that with the ever increasing APs, the removal of premium brands from the scheme, and the further adverse changes due in July, I am not the only person looking to leave Motability. It’s important to stress though that whilst the VED exemption will apply to anyone who is currently a Motability customer, in order to take advantage of the VAT exemptions on a new car purchase, the disabled person must be a full time wheelchair user who also needs the car that they travel in to be ‘permanently and substantially adapted’. In the case of my wife, we need a person hoist, which is bolted into the car, hence why she qualifies on both criteria.
