DWP Motability rule changes now in force as | Tech News

Ministers are hoping to claw back round £1 billion by 2030 by way of an overhaul of a scheme designed to help disabled people entry autos. The Motability scheme got here beneath fire final 12 months after it emerged that luxurious marques such as BMWs and Mercedes have been reportedly out there by way of it.

Chancellor Rachel Reeves stripped them from Motability on the Budget, and additional measures outlined in the autumn are now being introduced into impact. Motability clients who make optionally available one-off advance funds for bigger and more pricey autos will now be required to pay VAT, whereas all new leases shall be subject to insurance coverage premium tax.

Work and Pensions Secretary Pat McFadden mentioned: “Today’s changes are driven by the fairness that underpins this Government – fairness for the taxpayer, fairness for disabled people and fairness for the country.

“We’re saving £1 billion of taxpayer money by eradicating VAT reduction from some new Motability leases while guaranteeing the scheme nonetheless helps disabled people’s mobility and independence.

“We’re building a fair welfare system and an economy that works for everyone.”

The shake-up comes as ministers press forward with efforts to reform the welfare system, cut prices and return more people at the moment claiming illness advantages to employment.

Andrew Miller, chief govt at Motability Operations, the company that runs the Motability scheme, mentioned: “Tax changes announced in the UK Government’s Autumn Budget have significantly increased the cost of running the Motability scheme.

“While we have now needed to make tough choices in response, the changes we’re making imply the scheme can keep disabled people linked to freedom and independence now and in the longer term.

“The scheme continues to offer value for disabled people, including cars with no advance payment in addition to their weekly payments.”