The recent tax changes announced in last year’s Autumn Budget have begun to bite for mobility scheme users, with new rules on VAT on advance payments and Insurance Premium Tax taking effect from the start of July. For people in Mid Ulster who use the Motability Scheme, the consequences are immediate: the scheme is set to become more expensive for many customers.
How local users are affected
In the Mid Ulster area, 2,419 people currently choose to spend their qualifying mobility allowance to lease cars, powered wheelchairs or wheelchair-accessible vehicles through the Motability Scheme. Locally, these are not luxury purchases but essential lifelines that enable travel to work, college, medical appointments and to maintain social connections.
| Measure | Figure |
|---|---|
| Mid Ulster customers on Motability | 2,419 |
| Motability Foundation grants across Northern Ireland (2024–25) | £2.3 million |
| People supported across the UK by the scheme | Around 915,000 |
What the scheme provides and what will change
The Motability Scheme enables people who receive a qualifying mobility allowance to lease vehicles that come with insurance, servicing and breakdown cover. Some vehicles require a one-off advance payment; others are available with no advance payment so the lease can be met within the weekly allowance. Most leases run for three years, while wheelchair-accessible vehicles can be leased for up to five years.
- The Autumn Budget confirmed VAT will apply to advance payments from July.
- Insurance Premium Tax will also apply to new leases from the same date.
- Proceeds from vehicle sales at the end of leases are reinvested into the scheme or used to support disabled people’s access to mobility.
Motability Operations, the commercial organisation delivering the leases under contract to the Motability Foundation, says the scheme has supported roughly six million people since it began almost 50 years ago. The Foundation funds and supports research and initiatives aimed at increasing mobility and independence for disabled people.
Local impact and next steps for affected residents
For many in Mid Ulster the changes will mean higher up-front costs on certain vehicles and increased insurance charges on new leases. The Foundation has historically offered a range of vehicles with different payment options to help customers, and it provided £2.3 million in individual grants across Northern Ireland in 2024–25 to aid access to mobility solutions.
Residents using the scheme should check the terms of their current lease and speak directly with Motability Operations or the Motability Foundation about how the tax changes affect advance payments and insurance on any new arrangements. Local disability charities and advisers can also offer guidance on budgeting for the extra charges and whether discretionary grants or other support might be available.
The change is a reminder of how national tax decisions can have immediate practical consequences for households in Mid Ulster. For many, the Motability Scheme is central to remaining independent; clarity from providers and targeted support will be crucial as the new rules are implemented.
