Overview
- Ministers confirmed VAT on advance payments and Insurance Premium Tax on leases from July 2026, alongside the removal of premium brands such as BMW and Mercedes from the scheme.
- Motability says the package change will raise the average upfront cost by roughly £400 over a three‑year lease, though 40–50 vehicles will still be available with no advance payment.
- The DWP said existing leases and wheelchair‑adapted vehicles will be protected, with customer engagement beginning in spring 2026 and a disability impact assessment preceding implementation.
- The Conservative leadership has proposed tightening enhanced‑rate PIP rules to exclude conditions such as ADHD, mild depression and anxiety from qualifying for Motability access.
- DWP minister Sir Stephen Timms told MPs he will publish data on PIP claimants using Motability in due course and that his review will consider eligibility for the PIP mobility component, as MPs traded claims over the scheme’s scale and cost.