UK reforms 'motability' scheme to curb 'generous' taxpayers subsidies

Wed, 26th Nov 2025 13:21

LONDON, Nov 26 (Reuters) - British finance minister Rachel Reeves said on Wednesday that she plans to reform the 'motability' scheme, which allows people with disabilities to lease cars using state funding, in order to curb what she described as "generous" taxpayer subsidies.

The scheme lets those who are eligible for a publicly-funded allowance towards improving their mobility to use this funding towards leasing a vehicle, providing tax breaks on the leasing and insurance costs.

Motability has more than 850,000 customers, according to the commercial entity that manages the leases.

The scheme has attracted criticism because it had in some cases been used to pay for leases on luxury vehicles, though the list of eligible vehicles was tightened earlier this week to exclude such cars.

"The 'motability' scheme was set up to protect the most vulnerable, not to subsidise the lease on a Mercedes Benz so I am making reforms that will reduce generous taxpayer subsidies," Reeves said in her budget statement. (Reporting by William James; Editing by Catarina Demony)