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Hi,
Do we pay them at the price with VAT or without, if the car is VAT exempt (currently) under the Motability Fleet Operations?
Thanks.
I have ASD and thus have difficulty with social and understanding information, written and verbal. I process information in logical blocks, before I reply. Sometimes I'm right and sometimes I'm wrong.
I also have a corneal visual condition, which makes me visually impaired without daytime, or daytime bulbs, among other disabilities/conditions.
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As I understand it, Motability is currently exempt from paying VAT on all cars it purchases to lease out. The cars themselves need to be substantially and permanently adapted to qualify as VAT exempt. As I understand it, as you and not Motability are buying the extras then the adapted rule applies, ie if you’re not in a substantially adapted car, you need to pay the VAT.
It’d be interesting to see if anyone has been treated differently.
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
This is a point of irritation for many. We have to pay the price including VAT of all optional extras, but if you buy a car privately and get the same VAT exemption (as I am currently doing) you don’t pay the VAT. I do wonder if Motability Operations profit from this (they certainly do at resale).
to be fair most on motability do not have permanent and substantial alterations made.a hoist is not a substantial and permanent adaption nor are most hand controls.
so unless your having an adaption such as yours glos guy they would not qualify anyway.
to be fair most on motability do not have permanent and substantial alterations made.a hoist is not a substantial and permanent adaption nor are most hand controls. so unless your having an adaption such as yours glos guy they would not qualify anyway.
That’s true @mitch, although a person hoist, which my wife needs, does qualify, as long as she is a full time wheelchair user (which she is). This enables us to get the VAT off the car and all optional extras.
All disability related adaptations are VAT free, but what I am unclear about is whether Motability buy the whole car (including options) VAT free, in which case they make 20% profit on any factory options we add, or whether their block VAT exemption only applies to the base price. I suspect (and hope) that it’s the latter, so they only profit from any higher residual value as a result of the car having extras.
See VAT1615A. The vehicle has to be substantially and permanently adapted alongside being for a person that normally uses a wheelchair.
See VAT1615A. The vehicle has to be substantially and permanently adapted alongside being for a person that normally uses a wheelchair. https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/605061/VAT1615A.pdf
Yes, that’s what we are using as a private buyer, but Motability get a block VAT exemption on ALL of their cars, so these rules don’t apply to them, hence the question specifically about the options.
I can only assume that their exemption to the above rules only applies to the basic vehicle price and not the optional extras. As far as I know, Motability customers still have to pay the full cost (inc VAT) of all factory options (not disabled adaptations) even if they meet the criteria that exempts private buyers from paying the VAT?
I think it’s a case of looking at who is doing the purchasing.
Taking the current Enyaq offering:
SE L with suite and Plus pack is purchased by Motability to be leased to the customer. All including the additional pack is VAT Exempt.
Edition with Advance pack where the Edition is bought by Motability and the customer buys the Advance pack on top. VAT is only exempt if the customer qualifies by being a wheelchair user and the car is suitably adapted, otherwise VAT is payable on the additional pack despite the car as standard being exempt.
It’s not straight forward if you focus on the car but if you keep focus on who purchases, it becomes a little clearer.
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
I think it’s a case of looking at who is doing the purchasing. Taking the current Enyaq offering: SE L with suite and Plus pack is purchased by Motability to be leased to the customer. All including the additional pack is VAT Exempt. Edition with Advance pack where the Edition is bought by Motability and the customer buys the Advance pack on top. VAT is only exempt if the customer qualifies by being a wheelchair user and the car is suitably adapted, otherwise VAT is payable on the additional pack despite the car as standard being exempt. It’s not straight forward if you focus on the car but if you keep focus on who purchases, it becomes a little clearer.
This is my understanding, based on the Enyak,
If, Motability list on their site, the SEL and the SEL with Maxx pack (reduced price), I would imagine this falls under block VAT exemption.
On the other hand, if the Sportline was listed with no packs and you as the customer wanted to include the Maxx pack, this would then be VAT inclusive unless you are exempt.
???
Edit: do ignore my waffling, you already said what I was harping on about😂
Our current Motability car was the first that we had where we had a ‘permanent and substantial adaptation’ and we didn’t add any factory options to it, but a couple of you (@MFillingham @kezo) are now saying that, had we done so, we would have been exempt from paying the VAT on them. Not wishing to doubt those of you saying this, but is this 100% fact and does anyone have personal experience of this, as it’s not my understanding?
Whilst it is indeed true that if you qualify for VAT exemption on a private purchase, you also get the VAT off all the factory options as well, I have never seen Motability mention that people in our situation don’t have to pay VAT on the cost of factory optional extras on a Motability car. As I say, does anyone have first hand experience of this? To be clear , we are talking about things like sunroofs, upgraded alloys etc, not disability aids. If we were ordering another Motability car, even though we meet the criteria for VAT exemption on a private purchase, I would expect to have to pay the full price of any factory options on a Motability car.
As always, I’m happy to be proved wrong. Any links to this on the Motability website?
If an option pack is negotiotiated by Motability and visable on their website i.e Enayak + Maxx Pack, I’d bet money that its included with the negotion of the car (block VAT exemption) and also discounted.
Similar occured with the Maxda cx60 with packs listed by Motability.
I’ve not ordered any extras on the car I got on order but my current car I added IQ Matrix lights and paid the price that was listed on the manufactures price list that included VAT.
So thinking that if we are VAT exempt either the dealer or Motability pocketed the VAT or if we do pay VAT everyone’s a loser except the taxman. lol
See VAT1615A. The vehicle has to be substantially and permanently adapted alongside being for a person that normally uses a wheelchair. https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/605061/VAT1615A.pdf
There are four conditions, which must be met. The second one is very interesting: as opposed to Motability, it is permitted to use the vehicle for the domestic purposes. The way I read it – if a partner of a disabled person wants to pop out to meet friends in the pub they can definitely do it. Something which is not allowed under Motability.
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Apologies for briefness and spelling mistakes.Motability Skoda Enyaq SportLine 85x April 2024 (unhappy customer - Ombudsman pending)
Motability Mazda CX-60 PHEV July 2023 (unhappy customer - early termination on mechanical grounds)
Motability VW Touran Family Pack May 2019 (happy customer)@Glos_Guy
The absence of Motability giving VAT advice would probably be down to the complexity of the issue. If they don’t point out that some can get a VAT exemption, they don’t have to deal with a multitude of people demanding the same treatment whilst not being entitled to it.
Likewise, there’s nobody else who benefits from freely sharing any details but, as you’ve discovered, if you ask HMRC the right questions, they’re rather helpful and will set you straight.
Looking at the detail in how HMRC provide the disability exemption, they’re rather talk repeatedly about the person and that person’s needs. For example, if a person requires substantial and permanent adaptations to a car, they can claim… not if a vehicle is required to have substantial…
It’s a small distinction but very significant when you look at the detail of Motability’s exemption it comes down to the items they purchase and the items we buy and attach to that car.
I wonder how many have enough adaptations to qualify but pay a VAT included price for the adaptations they purchase? My guess is the supplier knows not to charge VAT and, therefore, it doesn’t crop up as an issue.
So, to continue the Enyaq example, we select a model from Motability’s website and ask the dealer to add the Maxx pack which we’ll pay for, we pay VAT on that pack. However, if we choose the same vehicle and add the same pack plus a hoist for the passenger and one for the boot, then the VAT shouldn’t be payable on the Maxx pack, although I’ve no idea who would know that off the top of their heads to either offer or request a VAT exemption on the upgraded pack.
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
@Glos-Guy If an option pack is negotiotiated by Motability and visable on their website i.e Enayak + Maxx Pack, I’d bet money that its included with the negotion of the car (block VAT exemption) and also discounted. Similar occured with the Maxda cx60 with packs listed by Motability.
@kezo I agree that if an option pack is included in the Motability description then the VAT will probably have been exempted at source, but that’s not what the OP is asking. I believe that the question is what happens when you add optional extras on top of the stated car. A few of you are saying that we pay the ex VAT price but I don’t believe that’s the case.@Glos-Guy If an option pack is negotiotiated by Motability and visable on their website i.e Enayak + Maxx Pack, I’d bet money that its included with the negotion of the car (block VAT exemption) and also discounted. Similar occured with the Maxda cx60 with packs listed by Motability.
@kezo I agree that if an option pack is included in the Motability description then the VAT will probably have been exempted at source, but that’s not what the OP is asking. I believe that the question is what happens when you add optional extras on top of the stated car. A few of you are saying that we pay the ex VAT price but I don’t believe that’s the case.
I think we agree, as you know the only way to get the Ex VAT price is the adaptations. For the more common Motability customer who doesn’t need those adaptations, it’s full retail less any discount you may or may not negotiate.
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
@kezo I agree that if an option pack is included in the Motability description then the VAT will probably have been exempted at source, but that’s not what the OP is asking. I believe that the question is what happens when you add optional extras on top of the stated car. A few of you are saying that we pay the ex VAT price but I don’t believe that’s the case.
As previous, if you add optional extra’s at time of ordering VAT will apply, unless you are exempt…
Looking through my paperwork, I added speed sign recognition to a Skoda Superb at the time of ordering the car (2017). The invoice shows £66.67 + £13.33 VAT = total £80.
As a side note, I added the above, which gave me a windscreen camera and with the use of OBD11, I was able to add functions to the car, that were turned off and theoretically only availble with more expensive option packs😉
@kezo At the risk of being pedantic, and/or going around in circles, I still believe that we are saying different things and that our understanding is different. I’ll try to explain;
The core vehicle lease is VAT exempt for all Motability customers. On this we are agreed. As you know, this is different for private customers who only get VAT relief if the person is a full time wheelchair user and the car has permanent and substantial adaptations.
If the car comes bundled with a pack that Motability has negotiated (as per examples given previously) then it has probably also been VAT exempted, but that doesn’t really matter either way, as we just look at the AP. I think we are agreed on this as well.
Any disability related adaptations are VAT exempted regardless of whether provided by Motability or purchased privately. I think we agree on that too!
Now here comes the point of difference. I think you are saying (and I apologise if I am misunderstanding you) that optional extras ordered by the customer (which was the specific question that the OP asked) are subject to VAT unless the person is exempt due to the reasons given earlier. My understanding (and I’ve never read anything to the contrary, but am happy to be shown a link that suggests otherwise) is that this is not the case.
If the person is a full time wheelchair user and needs a substantial and permanent adaptations, a private buyer can get the VAT off the total price of the car including all optional extras, regardless of what those options are (bigger alloys, sunroof etc). However, the same person (who meets the HMRC criteria) ordering a car through Motability still has to pay the full price of all options, and does not get the VAT knocked off.
Happy to be proved wrong, although it’s more for the OPs benefit than mine, as we are buying privately so will enjoy the full VAT exemption!
The way I read it – if a partner of a disabled person wants to pop out to meet friends in the pub they can definitely do it. Something which is not allowed under Motability.
@kdwolf This crops up regularly on this forum, and the Motability rules are not as strict as they are often interpreted. They are in fact the same as the HMRC rules. A partner of a disabled person is allowed to use the Motability car for use which is not always for the direct benefit of the disabled person.I know this, because when we retired I called Motability to explain that we now only needed one car, and as there would be frequent occasions when I would go out for the day without my wife (to visit friends etc) I asked if that was permissible, and they assured me that it was. They said that the rules are worded to deter abuse, such as a nephew who lives miles away using the Motability car as their own, whilst visiting their aunt once a month! When a couple live together and only need one car between them, they fully understand and accept that the partner will have cause to use the car independently, for no direct benefit to the disabled person, and this is absolutely fine.
HMRC rules are the same. We are leaving the scheme and buying a car privately VAT free (as my wife qualifies). I asked HMRC exactly the same question and they also confirmed (and gave me this in writing as well) that “as long as the car is available for the use of the disabled person whenever needed”, personal use by me for other purposes is permitted.
Now here comes the point of difference. I think you are saying (and I apologise if I am misunderstanding you) that optional extras ordered by the customer (which was the specific question that the OP asked) are subject to VAT unless the person is exempt due to the reasons given earlier. My understanding (and I’ve never read anything to the contrary, but am happy to be shown a link that suggests otherwise) is that this is not the case. If the person is a full time wheelchair user and needs a substantial and permanent adaptations, a private buyer can get the VAT off the total price of the car including all optional extras, regardless of what those options are (bigger alloys, sunroof etc). However, the same person (who meets the HMRC criteria) ordering a car through Motability still has to pay the full price of all options, and does not get the VAT knocked off. Happy to be proved wrong, although it’s more for the OPs benefit than mine, as we are buying privately so will enjoy the full VAT exemption!
I believe you are right or more right than me, as I assumed and only assumed that, if someone met HMRC criteria, they would automatically qualify for exemption on any factory or dealership options on a Motability lease and apologise for any confusion caused.
My question now is, Why and has anybody ever tried it?
No worries @kezo It’s a natural assumption to make. Like you, I also struggle to understand why people who meet the criteria get a better deal as a private buyer than Motability customers do.
I would also be interested to hear if anyone has tested this with Motability and had any luck. If we weren’t leaving the scheme shortly I would have been able to test this myself at next renewal, as my wife meets the criteria for full VAT exemption.
In truth, the way that this government is going (and most opposition parties are saying the same things) has motivated me to buy privately now, taking advantage of the current system whilst we still can. I can see them in the future capping the maximum value of car that you can get exemption on, for example. Also, I want to buy a car that still sounds like a car before that’s stopped as well although, like you, I agree that the 2030 cut off will inevitably have to move. Even though BMW have a huge range of highly rated EVs, and have stopped diesel engines on everything bar SUVs, my dealer tells me that only 1 in 5 cars that they are currently selling is an EV. I guess that your average BMW driver is probably more likely to want a petrol or diesel engine than those who are happy with cars from the far east, but I thought that was still telling.
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.
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