Motability announces major update for customers ahead of new rule changes next month

Motability has provided an update for some customers ahead of new law changes being rolled out in the coming weeks.Chancellor Rachel Reeves confirmed in the Autumn Budget that significant changes would be made to the Motability scheme following concerns.Labour announced that it would limit tax breaks available to Motability, which will help to save more than £1billion over the next five years.VAT relief for top-up payments made to lease more expensive vehicles will also be removed for new leases from July 2026. TRENDING Stories Videos Your Say The changes also outline that Insurance Premium Tax will apply at the standard rate to insurance contracts that are part of the Motability scheme.Motability said it would also remove luxury vehicles from the scheme, discontinue overseas breakdown cover and reduce its lease mileage limit.Changes launching on July 1, 2026, will not be introduced for customers who receive their allowance from Social Security Scotland.The Motability scheme operates under a separate agreement in Scotland, namely the Accessible Vehicles and Equipment Scheme (AVES). As a result of this difference, changes to Motability in Scotland need to be agreed with the Scottish Government before they can be rolled out.Motability confirmed that it was continuing discussions with the Scottish Government about what changes can be made and when they will be introduced.Before any changes are confirmed, customers receiving an allowance from Social Security Scotland can place an order as normal with the current lease package.However, they must be in the last three months of their lease to be able to place an order for their next vehicle.LATEST DEVELOPMENTSBritons risk being stripped of driving licences amid fresh fly-tipping warningMotorists face fines and penalty points as council cracks down on drivers ignoring lollipop patrolsDriverless taxis could make London's congestion crisis worse as concerns widen over new techThe current lease package in ScotlandFor a three-year lease:60,000 milesUp to eight tyre replacements5p excess mileage fee (plus standard rate VAT)No VE103 admin fee to take your car abroadFor a five-year Wheelchair Accessible Vehicle (WAV) lease:100,000 milesUp to 10 tyre replacements5p excess mileage fee (plus standard rate VAT)No VE103 admin fee to take your car abroadThe scheme also confirmed that the Trustees of the Motability Foundation have approved a one-off discretionary grant to pay for the additional costs of orders at the current lease package.This support will be provided while Motability continues to discuss changes with the Scottish Government.Social Security Scotland issues allowances for Scottish Adult Disability Living Allowance (SADLA), Adult Disability Payment (ADP), and Child Disability Payment (CDP). Our Standards: The GB News Editorial Charter