OK, coming into this debate, here is my two penn’orth ….
In the situation as described, this seems to me to be less about Motability and more about the dealership the customer is buying from. We do/did fall into the category the question is about. Our current car, an Audi Q4, was bought via Motability and adapted with a wheelchair swivel seat for my wife which would mean it meets the HMRC criteria for VAT free purchase. We also added to the order a Tech Pack which was an Audi optional extra not offered by Motability.
The total cost comprised the car’s advance payment + wheelchair swivel seat adaptation + Audi Q4 Tech Pack optional extra. That total cost was paid to the Audi dealership. Furthermore, all discussions about the Tech Pack were exclusively with the dealership, not Motability, and the Motability account and paperwork makes no mention of a Tech Pack (I’m fairly certain that is the case).
So I believe discussions about whether an optional extra such as the Tech Pack should be inclusive or exclusive of VAT should be had with the dealership, not Motability. We did, in fact, ask the dealership for a discount on the Tech Pack but was told that was not possible. However, it did not occur to me to ask whether, in our circumstances, the option should be VAT free. I guess if it had, the dealership would have sought clarification from HMRC (and possibly Motability) and we would then have benefited, or not, from a reduced cost and I would be able to answer the initial query with more clarity. As it was, I ended up paying full price for the option, inclusive of VAT.
Incidentally, I don’t believe the dealership was pulling a fast one here, or at least I like to think they weren’t. More likely was simply that they hadn’t come across this situation before and were as clueless as I was at the time.
We live and learn ….
P.S. I do agree that Motability ought to clarify this through their FAQs section or somewhere for the benefit of their (few) future customers who meet these HMRC conditions.