Overview
- From July 2026, VAT will be charged on advance payments and Insurance Premium Tax will apply to leases, with exemptions for vehicles that have substantial adaptations.
- Motability plans to retain a core range of around 40–50 vehicles with no upfront payment despite higher costs signalled in its guidance.
- Certain premium-brand models, including BMW, Audi and Mercedes, have been removed from the Scheme to prioritise value and accessibility.
- Potential package changes under review — covering mileage limits, overseas breakdown cover and use of insurance telematics — will be subject to disability impact assessments before decisions.
- Current leases are unaffected, customer engagement on proposed changes will begin in Spring 2026, and a new Special Investigations Unit with about 80 staff will bolster enforcement alongside stronger data‑sharing with authorities.