Motability changes launching today will have major impact on thousands of drivers - full list of new rules

1 sources1 storiesFirst seen 7/1/2026Score25Breakthrough

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Motability changes launching today will have major impact on thousands of drivers - full list of new rules.

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Major changes to the popular Motability scheme are being rolled out today as the Government cracks down on tax breaks and luxury vehicles.Chancellor Rachel Reeves announced an overhaul of Motability rules in last year's Autumn Budget, in a move that she said would raise £1billion over the next five years.The Budget claimed that the Motability Scheme benefits from "generous" tax breaks that subsidise provision beyond the core objectives of the service, including the lease of luxury vehicles.Significant changes include new VAT and insurance tax rules, in addition to the removal of extra add-ons, like European breakdown cover.

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TRENDING Stories Videos Your Say Most new leases ordered after today (Wednesday, July 1, 2026) will face new charges from VAT and Insurance Premium Tax, with Motability taking steps to ensure the service remains "sustainable".Drivers will now be subject to 20 per cent VAT on top-up payments, which are made in addition to the transfer of eligible welfare payments...

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