Procurement Act 2023 Thresholds: 2026 Table and 5 SME Steps

By Aoba Works · Published October 25, 2026 · 16 min read

How this guide was made: drafted with AI assistance from the official sources linked below, then passed an automated editorial check before publishing. Our process

• Procurement Act 2023
• Public Sector Tenders
• Sme
• Vcse

The Procurement Act 2023 thresholds from 1 January 2026, including VAT, are: £135,018 for goods and services bought by central government and £207,720 for sub-central buyers such as councils. Works and concession contracts have a threshold of £5,193,000, light touch services £663,540, and utilities goods and services £415,440 (Schedule 1, Procurement Act 2023; PPN 023). A contract at or above its threshold follows the full regime: tender notices, minimum time limits and an 8-working-day standstill. Below it, a lighter set of rules applies, and those rules start at £12,000 or £30,000. To work out which rules cover a contract you want to bid for, you need three facts: what is being bought, who is buying it, and the estimated value including VAT.

Which option is right for you?

Start with the table row that matches your situation. Each row tells you which figure to check first and which official page to open.

What is the Procurement Act 2023 threshold?

A Procurement Act 2023 threshold is the estimated contract value, including VAT, at or above which a contract becomes a "public contract" covered by the full rules. If a contract's estimated value is at or above the threshold for its type, it is a covered procurement. The buyer then has to use one of the Act's procedures, publish a tender notice, respect minimum time limits and, in most cases, observe a standstill period before signing. Below the threshold, Part 6 of the Act applies instead. Part 6 has fewer duties, but they still matter to you (Part 6).

The figure that applies depends on two things:

• The type of contract. It may be goods and services, works, a concession, a light touch service, a utilities contract, or a defence and security contract. The Act treats a contract as a works contract when its main purpose is carrying out works (Schedule 1).
• The type of buyer. For goods and services, central government authorities have a lower threshold (£135,018) than other contracting authorities (£207,720). Tussell's summary groups NHS buyers with central government for this figure.

Value means the buyer's estimate of the maximum amount payable over the whole contract. That includes options and extensions, and it includes VAT (Section 4 and Schedule 3). Buyers are not allowed to split a requirement into smaller contracts to get under a threshold.

Three mistakes come up often when suppliers read thresholds:

• Comparing your own ex-VAT price with a VAT-inclusive threshold. Add 20% VAT to standard-rated services before you compare.
• Looking at one year of a multi-year contract. A 2+1+1 year contract is valued over all four years.
• Assuming "below threshold" means "no rules". It means different rules, which are covered later in this guide.

Procurement Act 2023 threshold amounts (central government, goods/services/light touch)

As of October 2026, central government goods and services contracts are regulated from £135,018. For sub-central authorities the figure is £207,720, and light touch contracts are regulated from £663,540, all including VAT. These figures came in through The Procurement Act 2023 (Threshold Amounts) (Amendment) Regulations 2025, which were made on 18 November 2025 and took effect on 1 January 2026.

Sources: Schedule 1; Bevan Brittan, 2026 thresholds. As of October 2026.

Light touch contracts are a defined list of mostly people-focused services, such as health, social care, education and some community services. They have their own higher threshold and more flexible procedures. For a care provider or a charity running support services, that difference matters a lot. Section 54 sets no minimum participation or tender period for light touch contracts (Section 54). Section 51 also removes the mandatory standstill for them (Section 51). In practice, a light touch tender can close sooner than a standard one, so check the deadline on the notice as soon as you see it.

For example, take an NHS trust buying a £150,000 (inc. VAT) software service. That is above £135,018, so if Tussell's grouping of NHS buyers with central government applies, it is a covered procurement. The same £150,000 contract from a district council would be below £207,720, so Part 6 rules apply.

Procurement Act 2023 thresholds for works contracts

As of October 2026, the works threshold is £5,193,000 including VAT, and it is the same for every type of contracting authority (Schedule 1). Most building, refurbishment and civil engineering jobs that small firms win are therefore below threshold. They are still regulated, though, by Part 6.

There is a second set of figures in the works rules that many contractors miss. For below-threshold contracts, section 85 stops buyers from shortlisting bidders through a suitability assessment, meaning a pass/fail look at your legal and financial capacity or technical ability. For works contracts, that ban only applies under certain values. A central government buyer may run a suitability stage on a works contract worth £135,018 or more, and other authorities may do so from £207,720 (Section 85).

For example, a council advertising a £400,000 school roof replacement may ask questions on insurance, accreditation and past projects, and shortlist from the answers before inviting tenders. A £90,000 council works job cannot use that kind of pre-selection. To prepare evidence for the larger jobs, see our Selection Questionnaire Procurement Act 2023 guide.

The common mistake here is classing a "design and build" or "supply and install" job as goods. Whether it counts as works depends on the contract's main purpose. If most of the value is construction work, the works rules apply.

Procurement Act 2023 thresholds for utilities

As of October 2026, utilities contracts have their own thresholds: £415,440 for goods and services, £884,720 for light touch services and £5,193,000 for works, all including VAT (Schedule 1). They are higher than the central and sub-central figures because utilities run commercially in sectors such as water, energy, transport and ports.

Utilities buyers also get more flexibility on timing. Section 54 allows a utility or a non-central government authority to agree the tender period with pre-selected suppliers, in which case there is no minimum. Without such an agreement, the minimum for pre-selected suppliers is 10 days (Section 54). Private utilities that make a direct award do not have to observe standstill (Section 51). Part 6, the below-threshold rules, does not cover utilities contracts at all (Part 6). So a £300,000 contract from a water company has neither the full regime nor the below-threshold notice duty, and it may never be advertised on Find a Tender.

Pitfall: applying the £207,720 council figure to a utility. If the buyer is a water or energy company, check the utilities column of the table.

How often do Procurement Act 2023 thresholds change (2025, 2026 updates)?

Most Procurement Act 2023 thresholds are reviewed every two years. The latest change took effect on 1 January 2026, and the next is expected in January 2028 (PPN 023; Tussell). The reviews keep UK figures in line with the WTO Government Procurement Agreement and allow for currency changes. This is why the 2026 figures went down while the light touch threshold, which is a domestic figure, stayed the same (Bevan Brittan).

So if you search "procurement act 2023 thresholds 2025", the answer is different from 2026:

• 2025 (Act in force from 24 February 2025): £139,688 central, £214,904 sub-central, £5,372,609 works.
• 2026–2027: £135,018 central, £207,720 sub-central, £5,193,000 works.

Which set applies depends on when the procurement started, not when you bid. Procurements that started before 1 January 2026 keep the old figures. A procurement counts as started if, before that date, the buyer had published a tender notice, a transparency notice or a below-threshold tender notice, invited tenders, or contacted a supplier about the award (SI 2025/1200).

To check you are using current figures:

1. Open Schedule 1 on legislation.gov.uk. Check the banner for "outstanding changes" and the point-in-time date.
2. Compare with the latest Cabinet Office PPN on thresholds. For 2026–2027 that is PPN 023.
3. For Welsh buyers, check the Welsh Government's WPPN 017, which confirms the same 2026 values in Wales.
4. Throw away any saved table that shows £139,688 or £214,904, unless you are working on a procurement that started before 2026.

How to check which procurement rules apply to your contract value (5-step checklist)

Find out what is being bought and who is buying it, then estimate the full value including VAT and compare it with the right threshold. That comparison tells you which notices and time limits to expect. Do it for each opportunity before you start writing a bid. It tells you how long you have and whether you will face a selection stage.

Step 1: Identify the contract type

Read the notice's description and its CPV codes. Decide whether the contract is mainly works, goods, standard services, light touch services or a utilities contract. If you are not sure what a code covers, our CPV Codes UK guide explains how to read them.

Step 2: Identify the buyer type

Ask whether the buyer is a central government department or arm's-length body, an NHS body, a council or other sub-central body, a utility, or a devolved Scottish authority. Scottish public bodies follow the Public Contracts (Scotland) Regulations 2015, not the Act (CMS expert guide).

Step 3: Estimate the full value including VAT

Take the maximum value over the full term, including extensions and options, then add VAT where it applies (Schedule 3). On Find a Tender, the Value filter lets you search by minimum and maximum value, with options for including or excluding VAT (Find a Tender search).

Step 4: Compare against the right threshold

Use the tables earlier in this guide and pick one result:

Step 5: Read the notices and timescales that follow

Worked example (illustrative figures). A borough council wants office cleaning for 3 years plus a 1-year extension, at £45,000 a year before VAT.

• Maximum value: 4 × £45,000 = £180,000 ex VAT.
• With 20% VAT: £216,000.
• The sub-central threshold is £207,720, so this is a covered procurement.

The ex-VAT figure looks below threshold, but the value that counts is above it. That means you can expect a UK4 tender notice, at least 25 days to bid under an electronic open procedure, a possible selection stage and an 8-working-day standstill after the award. If the extension were dropped, the value would be £162,000 including VAT, which is a below-threshold contract. In that case there would be no pass/fail selection stage and no standstill.

Two mistakes are common at this step. The first is filtering Find a Tender on ex-VAT values while comparing against VAT-inclusive thresholds; pick one basis and use it every time. The second is ignoring the date the procurement started. If an exercise launched in December 2025, the 2024–25 figures apply to it.

Procurement Act 2023 vs Public Contracts Regulations 2015 thresholds

Threshold levels hardly changed when the Act replaced the Public Contracts Regulations 2015 (PCR 2015) on 24 February 2025. What changed is the way rules and notices work around those levels. Both regimes set their thresholds to meet WTO commitments, and both have used VAT-inclusive figures since 1 January 2022 (Bevan Brittan, 2023).

NHS Trusts are the change most likely to catch suppliers out. Under PCR 2015 they used the £30,000 below-threshold figure. Under the Act they fall under the £12,000 central government figure, so more of their small contracts are now advertised (Local Government Lawyer).

A pitfall here is searching only Contracts Finder. Its older notices relate to PCR procurements, while procurements under the Act are published on Find a Tender. Our Contracts Finder vs Find a Tender guide explains when to search each one.

What happens below threshold - do SMEs still need to follow rules?

Yes. Below-threshold contracts from £12,000 (central government) or £30,000 (other authorities) carry legal duties under Part 6, and several of them help small suppliers (Part 6). The duties fall on the buyer. What you need to know is what you can expect from them, and when to question a process that doesn't follow the rules.

Part 6 says that, for a notifiable below-threshold contract:

• Advertised opportunities get a notice. If the buyer advertises, it must publish a below-threshold tender notice first. If it only invites a closed group of pre-selected suppliers and doesn't advertise, it does not have to publish one (Section 87).
• There is no pass/fail selection stage, except for works contracts above the section 85 figures (Section 85).
• The buyer must consider SME barriers. Before inviting tenders, it must have regard to the particular barriers SMEs face and think about how to reduce them.
• Time limits must be reasonable and the same for every supplier.
• Invoices must be paid within 30 days. That term is implied into the contract.
• Not every buyer is covered. Schools, devolved Welsh authorities and transferred Northern Ireland authorities are outside these requirements.

Buyers may also reserve below-threshold procurements. Under PPN 005, in-scope bodies can limit a below-threshold competition by supplier location (UK-wide, by county, or by borough in London). They can also reserve it for SMEs and VCSEs, but only together with a location reservation. PPN 005 defines an SME as having fewer than 250 staff and either turnover of £44 million or less or a balance sheet total of £38 million or less.

How to find these opportunities:

1. Open Find a Tender search.
2. Under Procurement stage, tick Tender.
3. Under Value, set a Maximum value matching the right threshold, for example £207,720 for councils.
4. Under Suitability, tick Small and medium-sized enterprises (SME) or Voluntary, community and social enterprises (VCSE).
5. Add your Industry CPV code and Contract location, then sort by Closing (first).

For example, a social enterprise offering grounds maintenance in Kent could filter for council tenders under £207,720 in the South East with the VCSE box ticked. The SME and VCSE tick boxes depend on how the buyer marked each notice, so run a second search without them before you rule anything out.

Pitfall: asking a buyer to "add you to their list" for a sub-£12,000 or sub-£30,000 job and then waiting. Those contracts follow the buyer's own internal rules, which are often quick quotes. Contact the relevant team directly and register on the buyer's own e-tendering portal.

Next steps

Today, take one live opportunity and run the five steps on it. Write the contract type, buyer type and VAT-inclusive full-term value at the top of your bid notes.

Things you can do today

1. Register as a supplier on Find a Tender so that your organisation details are ready before a deadline. Our Find a Tender Registration guide walks through the screens.
2. Save a Find a Tender search with your CPV codes, your region and a maximum value set at the threshold that fits your usual buyer.
3. Check the "started" date of any procurement you are already bidding on. If it began before 1 January 2026, the older thresholds apply to it.

If you would rather not work this out yourself

• Free official learning (£0, as of October 2026; check the official page). The Cabinet Office's Knowledge Drops include short videos for SME and VCSE suppliers. They suit owners who want to understand the basics. They will not tell you how a particular contract is valued; for that, you need the buyer's tender documents.
• A procurement solicitor or bid consultant (paid). There is no official price list. Fees vary, so ask for a fixed-fee quote before you agree anything. This suits you if you are disputing whether a buyer valued a contract or ran a process correctly, or if you are bidding on high-value works. It is usually poor value for one-off bids under £30,000.
• If your sector buys mainly through frameworks, our Framework Agreement guide covers that route. Call-offs under frameworks have no standstill (s.51).

Related guides on this site: Selection Questionnaire Procurement Act 2023, Contracts Finder vs Find a Tender, CPV Codes UK.

FAQ

What is the Procurement Act 2023 threshold for 2026?

From 1 January 2026, the thresholds including VAT are £135,018 for central government goods and services, £207,720 for sub-central goods and services, £5,193,000 for works and concessions, and £663,540 for light touch contracts (Schedule 1). They apply to procurements that started on or after that date. The next review is expected in January 2028.

What are the current procurement act 2023 limits?

The full regime starts at the Schedule 1 thresholds above. Below-threshold duties start lower: at £12,000 for central government and NHS buyers and at £30,000 for other authorities (Section 87). Under those figures, the buyer's own internal rules apply.

What is the Procurement Act 2023 threshold for utilities?

As of October 2026, utilities thresholds are £415,440 for goods and services, £884,720 for light touch services and £5,193,000 for works, all including VAT (Schedule 1). Utilities contracts fall outside Part 6, so below these figures there is no national duty to publish a below-threshold notice.

Are Procurement Act 2023 thresholds the same across the UK?

Not entirely. Wales confirmed the same 2026 values as England in WPPN 017, although devolved Welsh authorities are outside the Part 6 below-threshold duties. Devolved Scottish authorities follow Scottish law, not the Act, and publish their own threshold values for 2026–2027 (gov.scot). Alongside the higher thresholds in the Public Contracts (Scotland) Regulations 2015, Scotland has its own lower national regulated thresholds of £50,000 for goods and services and £2,000,000 for works, both excluding VAT. If you bid to a Scottish public body, check the gov.scot page rather than the tables in this guide.

Sources

• Procurement Act 2023, Schedule 1 (threshold amounts)
• Procurement Act 2023, Schedule 3 (valuation)
• Procurement Act 2023, Part 6 (below-threshold contracts)
• Procurement Act 2023, Section 87
• Procurement Act 2023, Section 85
• Procurement Act 2023, Section 54 (time limits)
• Procurement Act 2023, Section 51 (standstill)
• The Procurement Act 2023 (Threshold Amounts) (Amendment) Regulations 2025
• PPN 023: 2026 Threshold amounts (Cabinet Office)
• WPPN 017: New thresholds (Welsh Government)
• Procurement threshold values 2026–2027 (Scottish Government)
• CMS Expert Guide: Public procurement in Scotland
• PPN 005: Reserving below threshold procurements
• GCA: Procurement Act 2023 notices explained
• Find a Tender search (GOV.UK)
• Transforming Public Procurement collection, incl. Knowledge Drops (GOV.UK)
• Bevan Brittan: Updated thresholds for January 2026
• Bevan Brittan: New values triggering below-threshold obligations (2023)
• Local Government Lawyer: Below-threshold contracts
• Tussell: Contract thresholds explained

Spotted something out of date or wrong? Tell us at shigoto.ai.note@gmail.com. Guides are re-checked against official sources on a rolling schedule.