Disabled individuals ― motor vehicles

Copyright © 2026 LexisNexis
Produced by a Tolley Value Added Tax expert
Value Added Tax
Guidance
tag-icon Autumn Budget 2025

Disabled individuals ― motor vehicles

Copyright © 2026 LexisNexis
Produced by a Tolley Value Added Tax expert
Value Added Tax
Guidance
tag-icon Autumn Budget 2025
imgtext

This guidance note provides an overview of the situations where a disabled person or charity can purchase or hire / lease a motor vehicle at the zero rate of VAT.

Autumn Budget 2025

Changes are to be made to the VAT and Insurance Premium Tax (IPT) treatment of vehicle leases entered into after 30 June 2026.

The VAT changes are intended to restrict reliefs for expensive vehicles provided under qualifying schemes which lease vehicles to eligible disabled people. The IPT changes are intended to bring the tax treatment of qualifying schemes into line with that of other commercial lease providers.

What conditions need to be met to zero-rate a motor vehicle?

The following provides a summary of the types of supply that can be zero-rated under this relief:

Type of userWhat goods / services can be zero-rated?
Disabled wheelchair user or individual purchasing a vehicle on behalf of a wheelchair user (nominated representative)The supply of a ‘qualifying motor vehicle’ that has either been designed to enable the disabled wheelchair user to

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  • 01 Dec 2025 09:50

Home/ Tolley Tax Guidance/ Value Added Tax / Dealing with sector specific VAT issues

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