In last year’s Autumn Budget, the UK Government announced tax changes that will affect the Motability Scheme. We’re making some changes to keep the Scheme as affordable as possible. These changes impact the Scheme throughout the UK, except customers who receive their allowance from Social Security Scotland.
A message from Andrew Miller, CEO of Motability Operations
I wanted to personally explain some changes we’re making to the Motability Scheme from July 2026.
Before I do, I want to acknowledge that some of these changes will be difficult and may affect you. I understand that any increase in costs or changes to what you receive can be worrying and frustrating, particularly when you rely on the Scheme every day for your independence.
From 1 July 2026, there will be four changes that will apply to new orders. These are reducing the annual mileage allowance, increasing the excess mileage fee, changing tyre replacement limits, and introducing a charge if you choose to take your car abroad.
I also want to be clear about what is not changing. Your lease will continue to include insurance, servicing, maintenance and breakdown cover. Protecting this all-inclusive package, and the independence it provides, has guided every decision we’ve made.
Scotland operates under its own distinct agreement called the Accessible Vehicle and Equipment Scheme (AVES). We are therefore working closely with the Scottish Government to understand how any changes may affect customers who receive allowances through Social Security Scotland. This work is ongoing with details still to be finalised.
What’s changing?
New orders placed on or after 1 July 2026 will include:
- Mileage allowance: New orders will include a mileage allowance of 10,000 miles a year. So, 30,000 over a three-year lease and 50,000 over a five-year new Wheelchair Accessible Vehicle (WAV) lease
- Excess mileage fees: We will be increasing the excess mileage fee to 25p per mile including standard rate VAT
- Tyre replacement: You can now replace up to six tyres over a three-year lease, which includes up to four for damage throughout your lease. If you have a five-year WAV lease, you can replace up to 10 tyres, with six included for damage
- EU breakdown: You’ll need to pay an admin fee and let the RAC know when you take your car abroad
We’ve made these changes to manage rising costs
In last year’s Autumn Budget, the UK Government announced tax changes that affect the Scheme. From 1 July 2026, VAT and Insurance Premium Tax (IPT) will apply to most leases. Together, these changes mean it will cost significantly more to run the Scheme. If we did nothing, the average cost of a new lease would increase by around £1,100.
It was clear to me that simply passing all these costs on to customers was not an option. We had to carefully consider how to reduce the tax impact as much as possible, but also focusing on changes that reflect how most customers already use their vehicles.
Protecting the Scheme and your independence mattered most
For nearly 50 years, the Motability Scheme has supported disabled people to stay mobile. We remain committed to that purpose, keeping the Scheme as affordable as possible, offering good value, and ensuring you have access to a wide choice of vehicles that meet your needs, including options with a no or low Advance Payment.
If you already have a lease with us, nothing will change for you right now. These updates will apply only to new orders placed on or after 1 July 2026.
Full details of the changes, along with information about the support available, can be found on our website.
Thank you for being part of the Motability Scheme, and for the trust you place in us.
Andrew Miller
Chief Executive Officer, Motability Operations
Andrew shares more about the Scheme changes
