Road Tax exemption/reduction and VAT relief on vehicle purchase
If you are in receipt of the mobility component of DLA or PIP you may be able to claim exemption or reduction to the road tax for your vehicle.
If you are a wheelchair user who needs a permanently and substantially adapted vehicle you may be able to claim VAT relief on the purchase price of the new vehicle.
Road Tax exemption
You can apply for exemption from paying road tax if you are in receipt of:
- Higher Rate mobility component of Disability Living Allowance (DLA)
- Enhanced Rate mobility component of Personal Independence Payment (PIP)
- Child Disability Payment (Scotland) (CDP) Mobility part – enhanced rate. See: Motability – Child disability payment
- Adult Disability Payment (Scotland) (ADP) Mobility part – enhanced rate. See: Motability – Adult disability payment
- War Pensioner’s Mobility Supplement (WPMS)
- Armed Forces Independence Payment (AFIP)
To claim the exemption or reduction the vehicle must be :
- Registered in the disabled person’s name or their nominated driver’s name.
- It must be only be used for the disabled person’s personal needs. That means the vehicle can’t be used by the nominated driver for their own personal use.
You can only have one vehicle tax exemption or reduction at any one time.
If you are getting a car through the Motability scheme it would automatically be registered to be exempt from road tax but if you already have a private vehicle that is road tax exempt you would need to discuss this with Motability (0300 456 4566) as you are only permitted to have one vehicle tax exemption at any one time.
If you have more than one privately owned vehicle or you get a Motability vehicle as well as the privately owned vehicle, you are advised to register the vehicle with the most expensive tax for exemption. If you have a privately owned car that is in a higher tax band (on which VED could be as much as £630 per year) and then get a Motability car in a low tax band there would be little point in having exemption for the vehicle in a low tax band and having to pay the expensive tax bill on the vehicle in the higher band. If you got a new Motability car with CO2 emissions of less than 100g/km the annual VED duty is currently £nil so you would get no tax saving if you left the exemption on the Motability car. Talk to Motability about swapping the exemption to your privately owned car and transferring the Motability car to the standard tax class.
For details see the DVLA information sheet “How to apply for free disabled tax”
Road Tax reduction
You can apply for a 50% reduction in road tax if you are in receipt of:
- Standard Rate mobility component of Personal Independence Payment (PIP)
- NB you cannot claim this if you are in receipt of DLA, WPMS or AFIP.
To claim the 50% reduction the vehicle must be :
- Registered in the disabled person’s name or their nominated driver’s name.
- It must be only be used for the disabled person’s personal needs. That means the vehicle can’t be used by the nominated driver for their own personal use.
You can only have one vehicle tax exemption or reduction at any one time.
For details see the GOV.UK document “Financial help if you’re disabled”
VAT relief on vehicle purchase
You can purchase, a motor vehicle VAT- free when all the following conditions are met:
- the motor vehicle is supplied to a disabled person who normally uses a wheelchair to be mobile.
- the vehicle is permanently and substantially adapted.
- the adapted motor vehicle is for the domestic or personal use of the disabled wheelchair user, and the supplier has been given a completed declaration, form VAT1615A, which confirms eligibility.
Definition of ‘wheelchair’ and ‘wheelchair user’
In legal terms, a wheelchair is a chair on wheels for disabled people, which is either manually propelled or electrically powered. A mobility scooter is not a wheelchair for VAT purposes. A wheelchair user is any disabled person who normally uses a wheelchair in order to be mobile. A person who occasionally uses a wheelchair is not eligible.
For further information please see the HMRC leaflet about purchasing zero-rated adapted vehicles for;
Updated April 2023