On 1 July 2026, the UK government announced that new tax rules for the Motability scheme would take effect, aiming to save £1 billion for taxpayers by 2030 while maintaining mobility support for disabled people. The changes remove luxury vehicles such as BMW and Mercedes from the scheme and introduce VAT on the optional advance‑payment top‑up for higher‑priced vehicles. Insurance Premium Tax will also apply to new leases. The reforms are part of a wider welfare package expected to save nearly £2 billion by the end of the decade. Eligibility remains unchanged; disabled people on enhanced mobility benefits will continue to receive the full £77.05 weekly award and may still choose vehicles that require no advance payment. Existing leases and the core Motability package, including insurance and breakdown cover, are unaffected.
© Crown copyright, 2024, GOV.UK.
Summary adapted from content licensed under the Open Government Licence v3.0.
For details, see https://www.nationalarchives.gov.uk/doc/open-government-licence/version/3/.
Original source: https://www.gov.uk/
Made by AI. If you spot anything of concern write us at contact@cybach.com. We’ll promptly correct irregularities.