The Procurement Act 2023 (Threshold Amounts) (Amendment) Regulations 2025 will come into force on 1 January 2026, updating the financial thresholds for the Procurement Act 2023.
As with the current thresholds, the new thresholds will be inclusive of VAT. This means that contracting authorities must consider whether their requirement is subject to VAT (and if so, at what rate) before calculating whether a particular requirement is above or below the threshold.
The new thresholds, together with a reminder of the current ones, are set below.
With the exception of the Light Touch Regime, the new thresholds are lower than the current ones meaning that more procurements will be caught by the Procurement Act 2023 than previously.
| Contract Type | Threshold until 31 December 2025 (inclusive of VAT) | New Threshold from 1 January 2026 (inclusive of VAT) |
|---|---|---|
Works contracts | £5,372,609 | £5,193,000 |
Supplies and services contracts (awarded by central government bodies) | £139,688 | £135,018 |
Supplies and services contracts (awarded by sub-central authorities) | £214,904 | £207,720 |
Supplies and services contracts (awarded by utilities) | £429,809 | £415,440 |
Light Touch services contracts | £663,540 | £663,540 |
Light Touch services contracts (awarded by utilities) | £884,720 | £884,720 |
Concession contracts | £5,372,609 | £5,193,000 |
Light Touch concession contracts | £5,372,609 | £5,372,609 |
For more information please contact Kris Kelliher.
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