Overview
- From July, new Motability leases will face 20% VAT on optional top-up payments and 12% insurance premium tax while other operational limits such as revised mileage and tyre allowances have also begun.
- Ministers and the DWP say the package responds to tax changes in the Autumn Budget that raised scheme costs and that the reforms aim to reduce public spending on the programme.
- The DWP has confirmed existing leases, eligibility for PIP and DLA, and wheelchair accessible vehicles will be exempt from the new charges so current users will not lose those protections.
- Motability Operations and the Motability Foundation say they will introduce a limited exceptions process, try to limit price rises for customers, and note about three quarters of users already fall within the new mileage allowance.
- The scheme serves roughly 860,000 disabled people and campaigners warn the changes could raise costs for some claimants while the government frames the moves as protecting value for taxpayers and the long-term sustainability of the service.