Premium Tax (IPT) will apply to most leases from 1 July 2026. Together, these changes mean it will cost significantly more to run the Motability Scheme. If we did nothing, the average cost of a new lease would increase by around £1,100.
We've worked hard to reduce the impact of these extra costs on you. We've carefully considered how to reduce the tax impact as much as possible, and focused on changes that reflect how most customers already use their vehicles. Before making any decisions, we gathered feedback from Motability Scheme customers from across the UK. You shared your views through surveys, interviews and focus groups. We used your thoughts to guide our approach, If you already have a lease, nothing is changing right now.
Here's what will change for new orders placed on or after 1 July 2026:
- 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 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 are travelling to the EU
Currently these changes are for anyone who receives a qualifying allowance from the Department for Work and Pensions (DWP) or Veterans UK. 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.
Our priority is protecting our all-inclusive package, which means your lease will still include:
- Insurance for up to three drivers
- Servicing and maintenance
- Breakdown cover
- Dedicated support from our team
To find the latest information and what it means for you, visit our dedicated Scheme Change Page.
