Disabled people warn of ‘severe’ consequences if chancellor removes Motability VAT exemption

Disabled people have warned of “severe” consequences if the chancellor goes ahead with reported plans to remove the Motability car scheme’s VAT exemption in next month’s budget.

Disability News Service (DNS) reported last week how the company that runs the scheme, Motability Operations, had warned that removing the VAT tax break entirely could impose an upfront cost of at least £3,000 on even the cheapest cars it offers.

There is no certainty that the chancellor will go ahead with removing the tax exemption entirely – which was revealed by the Times – and she may abandon the plans completely.

But the minister for social security and disability, Sir Stephen Timms, failed to deny plans to target the VAT exemption when asked by disabled Labour MP Emma Lewell on Monday about potential cuts to the scheme.

Instead, Sir Stephen said again that there would be no changes to personal independence payment until next autumn.

Yesterday, a Reform UK press conference on the party’s plans to slash disability benefits – particularly personal independence payment (PIP) – saw the party target the Motability scheme.

The party’s work and pensions spokesperson in the Commons, Lee Anderson, said the scheme had “got completely out of hand” and was “an absolute scandal”, and he suggested that all those receiving Motability cars should only be able to secure a “blue three-wheeler”*.

He said: “What’s wrong with that? Let’s go back to that.”

Meanwhile, disabled people who rely on Motability to maintain their independence have told DNS this week of the drastic impact that increased costs could have on their ability to afford a car through the scheme, and how this would affect their ability to work, enjoy leisure opportunities, and attend medical appointments.

Julia Dalton, a Motability customer for more than 40 years, relies on an adapted vehicle (pictured), which she says has allowed her “to work for over four decades, contribute taxes, and live independently” in east Yorkshire.

As an electric wheelchair-user, she needs a large vehicle with a hoist to lift her wheelchair into the car.

She said: “Without Motability, I could never have afforded a suitable vehicle.

“It is not possible for me to use a cheap second-hand car because if it breaks down, I cannot simply use a hire car that is not adapted for my needs.

“Without a reliable vehicle I would not have been able to get to work and would likely have lost my job.

“This scheme has protected my independence, wellbeing, and ability to contribute”.

She says that advance payments – on top of contributing the enhanced rate mobility component of PIP every month – have risen significantly in recent years.

Her latest vehicle in March cost her £4,000 in an advanced payment as well as £1,500 for essential adaptations.

She said: “I am managing financially, but even I would struggle to pay thousands more on top.

“If someone like me is at risk of coming off the scheme, what happens to those with less support?

“The consequences are severe: disabled people stuck at home; people losing work because they cannot travel; missed medical appointments; isolation.

“Motability is not a luxury. It is a lifeline.”

She added: “If exemptions are removed or costs continue to rise, we risk destroying a system that enables disabled people to live, work, and participate fully in society.

“I am deeply grateful for Motability. I want to see it protected for the future, so others can have the same opportunities that I had.”

Emma, from Leicester, told DNS that her Motability wheelchair-accessible vehicle (WAV) – which needed an advance payment of £4,500 – had made “a huge positive difference” to her life, and allowed her to continue to visit her dad after he had a stroke, firstly while he was in hospital, and then at home.

She said: “WAV taxis are expensive and difficult to arrange, and using public transport would have been impossible for me health-wise.

“Without that access, he might have declined further or needed residential care.

“The scheme has literally kept our family connected and independent.”

She said the knock-on effects of removing the VAT exemption – and the insurance premium tax, which is reportedly also being considered – would “make it even harder for disabled people to stay mobile”.

She said: “The knock-on effects would be huge — more reliance on carers, increased pressure on health and social care services, and greater difficulty getting to appointments or even maintaining social contact and contributions to society.

“If the tax relief were removed, I simply wouldn’t be able to afford a vehicle and would be stuck in my house even more.”

Richard, a Motability-user for 30 years, from the West Midlands, told DNS that the scheme was vital as a wheelchair-user living in inaccessible housing, and that he and many others would be forced to leave the scheme because it would become unaffordable if its VAT exemption was removed.

He has a progressive, neurological muscle-wasting condition and uses his Motability car to drive to a pool to swim, which allows him to keep the strength in his shoulders that he needs to pull himself up and down the stairs of his home.

Without the car, he would not be able to use the stairs and would end up in expensive extra care housing or a nursing home.

He said: “Being stuck at home would be very detrimental to my mental health.

“It will have similar effects on many, especially those who would have to give up work due to unaffordable initial payments.”

April, who has been a Motability customer for 15 years and lives in Lancashire, said the scheme has allowed her to maintain her independence and job and “gets me to and from my workplace safely and stress free”.

She has a small automatic hatchback which now requires a £1,000 advanced payment, when previously there was no advance payment required.

She said: “I fear these government proposals will make Motability pass these costs on to the scheme users – to the detriment of those struggling on low incomes and those needing larger adapted vehicles.

“The scheme must be preserved for those of us that need it to maintain our independence, to work, attend appointments, and to live decently, with dignity and safety.”

Michael Newbold, from Staffordshire, a Motability customer for more than 20 years, said the scheme was “essential” for him and his disabled wife.

He said: “I need a car for appointments and shopping, also for leisure.”

They have already had to cope with the council stopping paying for a personal alarm, and for the insurance on his stairlift.

He said: “It’s like little by little they are taking all the things that make life easier.

“Most people, in my opinion, will not be able to afford the VAT rise if they are in a similar position as me.”

Another customer, Phil, told DNS that he and his wife Kath would be “totally screwed” without their Motability vehicle.

They are both disabled, but it is Kath who is the Motability customer as she uses a powerchair following a spinal stroke, so she needs a WAV.

Phil said: “We had to find a £4,000 down payment for our WAV and when it has to go back [at the end of the lease] we’ll have to find the same if not more for the next vehicle.

“Adding VAT on top would make it unaffordable for us.”

Without the car, he said, they would be “totally isolated”, and they already both struggle with their mental health.

He said: “I can only believe others in the disabled community will be affected in the same way.

“My wife and I are from Bristol and it’s a city with an awful bus service so another reason the Motability scheme is so vital for us.”

*A reference to the Invacar that was provided by the government to disabled people up until the late 1970s, when it was replaced by the Motability scheme

**Motability Foundation, the charity that oversees the car scheme, is a DNS subscriber

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