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New procurement thresholds for UK public sector

The UK government has announced the new procurement thresholds that will apply from 1 January 2024 to all public sector contracts, utilities contracts and concession contracts.

The new thresholds (inclusive of VAT) are as follows:

Type of contract Central government authorities Other public sector authorities Utilities Concessions
Works £5,548,000 £5,548,000 £5,548,000 £5,548,000
Services £144,000 £222,000 £444,000 N/A
Supplies £144,000 £222,000 £444,000 N/A

The new thresholds must be calculated inclusive of VAT, rather than exclusive of VAT. This means that the thresholds will apply to a lower net value of contracts, and some contracts that were previously below the thresholds may now be above them.

The new thresholds and the change in the estimation method will affect the procurement procedures and obligations of public sector buyers and suppliers.

Public sector buyers and suppliers should familiarise themselves with the new thresholds and the change in the estimation method, and ensure that they comply with the relevant procurement rules and regulations.

For more information on the new procurement thresholds please contact Shireen Eliyas.

The content of this page is a summary of the law in force at the date of publication and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.

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