What is changing to the Motability Scheme from 1 July 2026?

Motability has confirmed several important changes for new orders placed on or after 1 July 2026. These include changes to VAT and Insurance Premium Tax, mileage allowances, excess mileage charges, tyre replacement limits and travel abroad administration.

The Government has announced tax changes that affect the Motability Scheme, with VAT and Insurance Premium Tax applying to most new leases from 1 July 2026. Motability says these changes mean it will cost more to deliver the Scheme, and that careful changes are being made to help keep it sustainable for the long term.

VAT and Insurance Premium Tax changes

From 1 July 2026, VAT and Insurance Premium Tax, also known as IPT, will apply to most Motability Scheme leases. Motability explains that, where VAT applies, it will not be added to the lease payments made from your mobility allowance. Instead, VAT will apply at the standard rate to most other lease payments, including Advance Payments, excess mileage charges and early termination fees.

GOV.UK confirms that the measure applies from 1 July 2026 to new leases from that date. It also explains that the VAT zero-rate remains for vehicles designed or substantially and permanently adapted for wheelchair or stretcher users.

For many customers, this makes it even more important to get clear advice before choosing their next Motability vehicle. Startin Group can help you understand your options and what the changes may mean when comparing vehicles across our group.

Mileage allowance changes

For new orders placed on or after 1 July 2026, Motability leases will include an average yearly mileage allowance of 10,000 miles per year. This means a total of 30,000 miles over a three-year lease. Wheelchair Accessible Vehicles, often known as WAVs, will have a total allowance of 50,000 miles over five years.

If you travel regularly for appointments, work, family commitments or day-to-day independence, mileage is something worth thinking about before you choose your next vehicle. Our team can help you consider your usual journeys and whether your expected mileage suits the Scheme changes.

Excess mileage charges

Motability has confirmed that, for orders placed on or after 1 July 2026, excess mileage will be charged at 25p per mile including standard rate VAT, or 21p per mile if your lease benefits from VAT concessions.

This means it is important to think carefully about how many miles you are likely to cover during your lease. A Motability vehicle is often part of everyday life, so understanding your driving habits before ordering could help you avoid unexpected charges at the end of your agreement.

Tyre replacement changes

Tyre replacement will still be included as part of the Motability lease, as long as it is within fair use. However, Motability has confirmed new limits for orders placed on or after 1 July 2026. During a three-year lease, customers can replace up to six tyres, including up to four for damage. For a five-year WAV lease, customers can replace up to ten tyres, including up to six for damage.

Motability says the new limits are designed to reflect how tyres are typically used, while still helping customers stay mobile. If you already have a lease or order before 1 July 2026, Motability says this tyre replacement change will not affect you.

Travel abroad changes

If you order on or after 1 July 2026, you will need a VE103 certificate before travelling outside of the UK in your Motability Scheme vehicle. Motability has confirmed that a £22 administration fee will apply for the VE103 certificate, which proves you have permission to take the vehicle abroad.

You will still be able to request this through the RAC, and Motability states that you will still be covered under your lease when travelling abroad. The VE103 certificate lasts for 12 months and covers trips within that period.

What is not changing?

Although there are changes coming, Motability has also been clear about what remains included. The Motability lease will continue to include insurance, servicing, maintenance and breakdown cover. Motability Operations has said that protecting this all-inclusive package has guided the decisions being made.

That means customers can still benefit from the core support that makes the Motability Scheme valuable, with Startin Group here to help you through the dealership side of the journey.

Should you consider ordering before 1 July 2026?

If you are already thinking about your next Motability vehicle, it may be worth speaking to Startin Group before the changes come into effect.

Motability confirms that the updates apply to new orders or leases placed on or after 1 July 2026. This means customers considering a new vehicle may want to understand their options before that date.

At Startin Group, we will not pressure you into a decision. Instead, our teams can help you look at your needs, compare your options and understand what may be changing so you can make a confident, informed choice.