This change follows an ongoing debate over the accessibility of the Motability scheme. Some claimants have raised concerns over the widening eligibility criteria, which they believe have allowed people with less severe conditions to benefit from the programme. As the government adjusts its policies, both the costs and accessibility of the scheme are set to evolve.
Tax Changes Set to Increase Motability Costs
Starting in July 2026, new tax regulations will impact the cost structure of the Motability scheme. The government will apply VAT to Advance Payments and introduce Insurance Premium Tax on lease agreements. According to the DWP, these changes will lead to an average increase of around £400 on the total upfront cost of leasing a vehicle under the scheme.
While this change is intended to improve the cost-effectiveness of the scheme for taxpayers, it has sparked concern among disabled people who depend on the programme for independence. The increase in costs comes at a time when many disabled people are already grappling with financial pressures, and critics warn that these changes may disproportionately affect those who rely on the scheme to get to work, healthcare, and daily activities.
However, the DWP has clarified that vehicles requiring no upfront payment will still be available, and those using the mobility component of the Personal Independence Payment (PIP) will continue to have access to essential vehicles. In addition, the government has reassured that some vehicles, including wheelchair-adapted ones, will be exempt from the new tax changes.
Review of Eligibility and Growing Debate on Accessibility
The Motability scheme, which provides vehicles to disabled people in exchange for their PIP mobility component, has long been seen as a vital service. It enables many individuals to maintain a level of independence that would otherwise be difficult to achieve. However, recent changes have raised questions about who should be eligible to use the scheme.
In a recent debate in the House of Commons, Secretary of State for Work and Pensions, Helen Whately, suggested that the scheme was being used by individuals with conditions not traditionally associated with severe disability, such as ADHD or tennis elbow. According to Whately, this has led to a broader group of claimants accessing vehicles through the Motability scheme, which some critics see as unfair.
In response, Labour MP Shaun Davies highlighted the importance of the Motability scheme for individuals with significant disabilities, noting that the ability to access a vehicle is often key to securing employment and accessing healthcare. Whately’s comments have sparked a wider conversation about the balance between ensuring the programme’s sustainability and maintaining its focus on those most in need.
The government has indicated that it will review the eligibility criteria for the mobility component of PIP. While some argue that the scheme should be restricted to people with more severe disabilities, others believe that the changes could reduce the ability of disabled people to live independently, particularly those with less visible impairments.
