Government Budget Statement - Taxation Changes

26 November 2025

Motability Operations Group plc Government Budget Statement - Taxation Changes Affecting the Motability Scheme

Motability Operations Group plc ("Motability Operations") notes the announcement made by the Chancellor of the Exchequer, the Rt Hon Rachel Reeves MP, in the Budget on 26 November 2025, confirming the Government's decision to change the taxes affecting new leases under the Motability Scheme with effect from July 2026.

The measures include:

1. Removal of the current exemption from Insurance Premium Tax (IPT) for the Motability Scheme; and

2. The Motability Scheme will now be subject to Value Added Tax (VAT) at 20% on advance payments.

These changes will increase the overall cost base of the Motability Scheme, with potential implications for vehicle affordability for customers. Motability Operations is assessing measures to mitigate the impact of these taxation changes and to safeguard the Motability Scheme's long-term ability to meet the needs of disabled people, without compromising its financial stability.

Andrew Miller, Chief Executive of Motability Operations, said:

"As we design and implement the changes to the Scheme as result of the reduction in tax reliefs, we remain absolutely committed to the financial sustainability of the Motability Scheme. None of the changes will compromise our robust financing model or structures in any way. The Scheme will continue to be managed prudently and sustainably, exactly as it always has been."

Further information about how the Motability Scheme might evolve and the options being considered to change the leasing package as a result of these taxation changes can be found on Motability Operations' media centre:

https://news.mo.co.uk/

Enquiries:

Motability Operations Limited

Investor Enquiries:

InvestorRelations@mo.co.uk

Media Enquiries:

Pressoffice@mo.co.uk