“If we did nothing, the average cost of a new lease would increase by around £1,100,” stated Andrew Miller, a representative of the Motability Scheme, highlighting the significant financial implications of upcoming changes to the motability mileage allowance.
Starting July 1, 2026, the mileage allowance for Wheelchair Accessible Vehicles (WAV) will be slashed from 100,000 miles to just 50,000 miles over a five-year lease. This drastic reduction has raised alarms among the approximately 890,000 disabled individuals who rely on the Motability Scheme for their transportation needs.
The new allowance translates to an average of only 10,000 miles per year, a figure that many users may find insufficient given their mobility requirements. For instance, a WAV customer who drives 75,000 miles over the five-year lease would exceed the new limit by 25,000 miles, incurring an excess mileage charge of around £5,250 at a rate of 21p per mile.
In addition to the mileage restrictions, standard cars will also see their mileage allowance reduced from 60,000 miles to 30,000 miles over a three-year lease. This change, coupled with the introduction of VAT and Insurance Premium Tax (IPT), is expected to increase advance payments for new leases by about £400. These tax changes, as Miller noted, will significantly elevate the costs associated with running the scheme.
The backdrop to these changes is the UK Government’s decision to apply VAT and IPT to the Motability Scheme, a move that Motability estimates will add approximately £300 million in annual costs. This financial burden raises questions about the sustainability of the scheme and its ability to meet the needs of its users.
What observers say
“Together, these tax changes mean it will cost significantly more to run the scheme,” Miller added, emphasizing the compounded effect of these adjustments on users. The anticipated financial strain is not just a matter of increased payments; it could also affect the accessibility of transportation for many disabled individuals who depend on these vehicles for their daily activities.
As the implementation date approaches, concerns continue to mount among users and advocates for the disabled community. The changes to the motability mileage allowance are likely to provoke further discussions about the adequacy of support for disabled individuals in the UK, particularly in light of rising living costs and the challenges of maintaining mobility.
With the new regulations set to take effect in less than three years, stakeholders are urged to engage in dialogue to address the potential impacts on the disabled community. The Motability Scheme, while a vital resource, now faces scrutiny as it navigates the complexities introduced by these financial adjustments.