[kezo]

I came across this in Disability Rights news, published on 8th December:

In the November 2025 Budget, the Chancellor announced that there would be changes to the Motability Scheme, in particular removing the VAT exemption for advanced payments for certain vehicles. This has caused concern for Motability users.
The Motability Scheme  enables Disabled people, who receive the higher rate mobility component of Personal Independence Payment (PIP), to use the mobility component of PIP, to lease a vehicle so they can get around safely and independently.

860,000 PIP recipients currently have a Motability vehicle and it is important that they understand how the Scheme is going to change and whether the change will affect them, the Motability Foundation has put together the following Questions & Answers, to clarify the changes to the Scheme.

Question: What changes to the Motability Scheme were announced at the Autumn Budget?
Answer: At the Autumn Budget, the Government confirmed that Value Added Tax (VAT) will apply to Advance Payments and Insurance Premium Tax (IPT) will apply to Scheme leases. These changes will take effect from July 2026. The Government have confirmed that VAT will not be added to wheelchair accessible vehicles.

These tax changes will mean the overall cost of providing the Scheme will become more expensive but will remain sustainable with a choice of affordable vehicles for those who use it. The Motability Scheme will seek to make changes to the leasing package so that these additional costs can be absorbed where possible.

Question: How will these tax changes affect lease costs for disabled people?
Answer: The average Advance Payment is expected to rise by around £400 across a three-year lease. The Scheme will continue to offer 40–50 vehicles with no Advance Payment, meaning there will be no up-front costs to pay in addition to weekly leasing costs.

Has the Budget changed eligibility for the Motability Scheme?
Answer: No, eligibility for the Motability Scheme has not changed.  Eligibility will continue to be determined by Government, and there are no confirmed changes to this at this time.

Question: Are current customers affected?
Answer: Current leases will not be affected by any changes. If someone chooses to lease another vehicle at the end of their current lease, then they would be affected by any changes.

Question: Will the Scheme remain affordable for disabled people?
Answer: Yes. Motability Foundation and Motability Operations will work to ensure that the Scheme remains as affordable as possible, including:

Offer around 40–50 vehicles with no Advance Payment
Maintaining availability of a wide range of suitable and good-value vehicles
Providing subsidies and grants for WAVs and essential adaptations
Question: Will lease payments exceed qualifying benefit allowance amounts, such as the PIP higher rate mobility component, following these changes?
Answer: The Scheme is designed so that many customers can meet their weekly lease costs using their mobility allowance alone.

Motability Operations and the Motability Foundation are committed to maintaining this principle. The continued availability of 40–50 vehicles with no Advance Payment means customers choosing these vehicles will not be required to pay additional upfront or ongoing costs beyond their weekly mobility allowance.

Should customers choose to lease vehicles that cost more than the sum of their allowance over the life of the agreement, they pay an Advance Payment. Advance Payments will increase as a result of the extra tax imposed on the Scheme, however, the weekly leasing cost will continue to be the weekly higher rate mobility allowance. As the Scheme evolves and we fully understand the impacts changes may have on disabled people, the Motability Foundation will also need to consider how its grant programmes best support those most in need.

Motability Foundation will continue to provide grants to support people with the most profound needs to access the Scheme.

Question: How will the Motability Scheme continue to support customers?
Answer: While some change is necessary to ensure future longevity, the Motability Scheme remains committed to its core purpose – providing mobility to disabled people, many of whom have no choice but to use private transport because of inaccessible public transport and infrastructure across the UK. The Motability Scheme commits to:

No changes for customers in current leases. Changes to the Scheme would relate to new leases.
Continuing to provide a range of around 40 to 50 vehicles available to lease with no Advance Payment
Motability Foundation and Motability Operations will continue to subsidise and provide grant funding for the ongoing provision of Wheelchair Accessible Vehicles, while also funding adaptations to support over 82,000 customers with essential mobility solutions.
Motability Foundation will continue to provide grants to support people with the most profound needs to access the Scheme, having awarded £59.3 million in 2024/25 to help over 10,000 customers benefit from essential mobility solutions.

Question: Will the cost of new leases for vehicles with no Advance Payment increase? If so, by how much?
Answer: Offering vehicles with no Advance Payment will remain an ongoing commitment of the Scheme, with 40–50 such vehicles available even after the tax changes.

Therefore, while the lease cost of a vehicle itself may increase as a result of tax changes, customers will still be able to cover the weekly lease cost using their mobility allowance, as they do today.

Question: Will the cost of new leases for vehicles substantially and permanently adapted for wheelchair or stretcher users increase, and if so, by how much?
Answer: The Budget confirmed that tax changes will not apply to vehicles designed for, or substantially and permanently adapted for, wheelchair or stretcher users. In addition to this, the Motability Foundation remain committed to:

Continuing to subsidise and grant-fund wheelchair accessible vehicles
Supporting the cost of adaptations
Keeping these vehicles as affordable as possible
Question: What changes have been made to premium brand vehicles?
Answer: Premium brand vehicles were removed from the Scheme by Motability Operations on 24 November 2025. The Scheme will focus on providing vehicles that:

meet disabled people’s needs • represent value and purposesupport long-term affordability
New vehicle models are reviewed by the Motability Foundation’s independent Scheme Oversight Committee.

An overview of the full, up-to-date range of vehicles available on the Scheme can be found here.

Question: What other changes are being considered to manage costs?
Answer: To minimise price rises caused by new taxes, Motability is considering adjustments to:

mileage allowances
overseas breakdown cover
telematics use for insurance purposes
other included services
Proposed changes to the leasing package will undergo disability impact assessment by the Motability Foundation before any changes are approved, announced and implemented.

Question: When will detailed changes be communicated to customers?
Answer: Motability Operations, which runs the Scheme, will begin engaging with customers about the proposed changes in spring 2026. Proposed changes to the leasing package will undergo disability impact assessment by the Motability Foundation, which oversees the Scheme, before any changes are approved, announced and implemented.

Question: Where can Scheme customers find additional communications on Scheme changes?
Answer: Further detail of changes relevant for Motability Scheme customers can be found here – Your questions answered about the Motability Scheme changes.

https://www.disabilityrightsuk.org/news/motability-answers-concerns-over-governments-plans-scheme

 

Topic

[Glos Guy]

Many thanks for posting this @kezo An interesting read. My thoughts on this are;

They make a big thing that there will still be 40-50 cars with no AP, but that the lease costs of these cars will have increased (presumably by at least IPT). By definition, this means that any additional lease costs incurred on these cars will be spread across the other cars on the scheme = higher APs.

There is a suggestion that the increases in costs may make more people eligible for grants. These have to be paid for somehow so, again, the only solution is to cover this additional cost from scheme members who do not qualify for grants = higher APs.

With all 3 of the main political parties saying that the scheme should revert to being for people with physical disabilities only (and the changes just announced being for political and optical reasons), will grants continue to be restricted to those with limited means, or will they add those with the greatest level of physical disability (full time wheelchair users etc)? I think that the Timms review is likely to prompt this debate.

I’m relieved to see that Motability have repeated what I read in the Budget Red Book (and posted here at the time) that those of us who have to have “substantial and permanent adaptations for a full time wheelchair user” will be exempt from the average £400 hike to APs. It will be interesting to see how they manage this – different APs or a flat price reduction?

Trackers – I think that there’s a strong case for fitting trackers to those cars where the only driver(s) don’t live with the scheme customer, as it could be established how often (or how little) the car attends the home of the disabled person. However, I think it would be a complete waste of money to fit them to cars where the only named driver(s) live with the customer. In these situations, a tracker would be utterly pointless as, even if journeys were monitored, it would be absolutely impossible to tell who was driving, whether or not the disabled person was present or whether or not the journey benefitted them in some way. Also, as I confirmed with Motability when we last changed, partners who live with the customer are allowed to use the car for their own needs and not always for the benefit recipients benefit.

EV focus – Even though the 2030/35 target dates are almost certain to have to move back (especially with the EU likely to be announcing soon a move back to 2040, and the pence per mile charges just announced for the U.K. likely to cause an even greater shortfall against the already struggling ZEV mandates targets), I think that the government will continue to apply pressure on Motability to push EVs, possibly even more so. With the removal of all premium brands and the growing influx of cheap Chinese imports, the choice of ICE cars on the scheme, especially those of a decent size, which is already very poor, is only going to get worse.

2026 is going to be a significant year for the scheme and its customers and with the Timms review not happening until the end of the year, 2027 could end up being just as disruptive – if not more so!

[ChrisK]

Can’t see Motability being too concerned about disability needs as I’ve often complained to them about the premium I’ve paid in larger AP’s because of the need of automatic gearbox, something I’ve pointed out to them over those years that my manual driving licence was changed to “auto’s only” by DVLA directly because of my disability. They have never suggested any help or indeed any real answer to that complaint.

I do wonder how the 12% insurance tax will be applied or the VAT on AP’s, are we expected to pay up front for 3 years VAT and insurance tax or will we need to have a direct debit with Motability to drip feed the cost.

Just slightly off topic I noticed this morning in the GB-News app that Motability customers who leave the scheme could be hit with a 75% increase in insurance cost because of the lack of NCB and that many insurance companies do not except the “good driver” letter that MB give us on leaving. Then  the half witted BS story goes on to say that customers who leave need to ask, wait for it, need to ask RSA for a good drivers note.

[Glos Guy]

@ChrisK I agree with you regarding autos. If you have to have one due to disability then you shouldn’t have to pay the full additional premium. Admittedly that would increase the APs for everyone else.

I can only see the VAT and IPT being applied to the AP. Motability won’t want to get into a payment scheme due to the risks of default. Besides, they have already said that APs will rise by around £400 to cover this (on top of the endless AP rises of recent years).

As you say, the GB News story is utter BS. It used to be the case that only a few insurers would honour no claims history through Motability, but now most do. I think that some will even allow more than the previous maximum allowance of 3 years. Even only getting 1 years no claims substantially reduces premiums, so even those with zero no claims will only have pain for the first year (unless they live in a very high risk area).

[kezo]

@Glos-Guy agree with what you say!

What struck me, is Motability said leases will increase by c.£400, which in my mind. that figure must be based on an artificially low AP?

[Oscarmax]

Mobility is a big customer, the manufactures need to produce a specific number off vehicle to make it financially viable, also they need to unload their outgoing models. Recently we have seen an influx of Chinese state subsidised EV’s European manufacture have responded  and reduced their prices.

I can see manufacture reducing their prices to Mobility, whether Mobility pass on these savings we will see. Hopefully we will see little or no changes in AP.

 

Unfortunately I have suffered a brain injury and occasionally I get confused and often say the wrong thing.

[Author]

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