You also need a new certificate if you are going abroad, while there are limits on ‘repairs’
Motability allows people with disabilities to access transport more easily
Major changes to the Motability Scheme have come into effect on Wednesday, July 1, 2026. The updates are the result of UK Government tax reforms originally announced in the Autumn Budget, which removed tax exemptions and introduced standard VAT and Insurance Premium Tax (IPT) to the scheme.
The rules apply to any new applications or renewals placed on or after July 1, 2026. A standard 20% VAT now applies to Advance Payments. On average, this is expected to increase upfront vehicle costs by about £300 to £400, depending on the model.
Standard three-year leases are reduced from 60,000 miles to 30,000 miles total (10,000 miles per year) and five-year Wheelchair Accessible Vehicle (WAV) leases are reduced to 50,000 miles total.
If you go over your limit, the penalty has increased significantly to 25p per mile, including VAT. Motability is launching an exceptions process on July 8 for those who must travel further for essential healthcare, education, or work. Instead of unlimited replacements, standard leases now include up to six tyres over three years – with a maximum of four due to accidental damage. WAV leases allow up to 10 tyres.
If you take your vehicle abroad to the EU, you must now get a VE103 certificate from the RAC and pay a £22 administration fee.
If you already have a Motability vehicle and your lease is mid-term, nothing changes for you right now. Your mileage limits, tyre allowances, and payments are locked into your original agreement until it ends. The overall package still includes insurance for up to three drivers, full UK breakdown cover, routine servicing, and maintenance.
The part of the lease paid directly from your qualifying disability benefit remains free from VAT. These changes apply across England, Wales, and Northern Ireland, but do not apply to Scotland yet while Motability coordinates with Social Security Scotland.
