Disabled individuals ― motor vehicles

Produced by a Tolley Value Added Tax expert

Value Added Tax

Guidance

Autumn Budget 2025

Disabled individuals ― motor vehicles

Produced by a Tolley Value Added Tax expert

Value Added Tax

Guidance

Autumn Budget 2025

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 user	What 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

Continue reading the full document

To gain access to additional expert tax guidance, workflow tools, generative tax AI, and tax research, register for a free trial of Tolley+™

TAKE A FREE TRIAL NOW

Popular Articles

Trusts and Inheritance Tax

Spouse exemption from inheritance tax

Spouse exemption from inheritance taxArguably, the most important inheritance tax exemption is the spouse exemption from inheritance tax.There is no IHT to pay on gifts from husband to wife and vice versa, or from one civil partner to the other (referred to collectively in this note as ‘spouses’).

14 Jul 2020 13:56 | Produced by Tolley in association with Emma Haley at Boodle Hatfield LLP Read more

Corporation Tax

Substantial shareholding exemption ― overview

Substantial shareholding exemption ― overviewThe substantial shareholdings exemption (SSE) provides a complete exemption from the liability to corporation tax on the gains generated from qualifying disposals of shares and interests in shares by qualifying companies. No claim is required. Provided

14 Jul 2020 13:44 | Produced by Tolley Read more

Trusts and Inheritance Tax

Tax on UK resident beneficiaries of non-resident trusts ― overview

Tax on UK resident beneficiaries of non-resident trusts ― overviewIntroductionUK resident beneficiaries of non-resident trusts are subject to UK tax on payments or benefits received from the trust. They are liable for income tax on income distributions from the trust and they may also be liable to

14 Jul 2020 13:47 | Produced by Tolley Read more

Disabled individuals ― motor vehicles