Rachel Reeves expected to scrap £300m in tax breaks for Motability scheme

Rachel Reeves is expected to press ahead with scrapping about £300m in tax breaks for the Motability scheme that helps provide cars for disabled people, in a move likely to spark concerns among some Labour MPs.

The Treasury was reported to have been considering axing tax breaks up to £1bn but savings will not be as high as that figure, with concerns among ministers that some policy options could have led to Motability’s collapse.

At the budget, she is expected to end some tax reliefs for Motability cars, including imposing an insurance premium tax in a move that would make leasing a car more expensive and charging VAT on advance payments for higher-value cars.

However, the more drastic option of scrapping VAT exemptions on sales of former Motability vehicles will not be pursued, over