Procurement: updated thresholds for January 2026 published

The procurement thresholds for 2026/2027 have been released via the Procurement Act 2023 (Threshold Amounts) (Amendment) Regulations 2025 which were laid before Parliament on 21 November 2025. 

The new procurement thresholds will apply from 1 January 2026 to all procurements commenced on or after that date. Aside from the Light Touch Regime, the thresholds are lower meaning that more procurements will be caught by the Procurement Act 2023 than previously.

As has been the case since 2022, the value of a procurement must be calculated inclusive of VAT. By way of example, a contract for services due to be awarded by a local authority (a sub-central authority) with a value net of VAT of £205,000 would be over the relevant threshold because once VAT were taken into account the total contract value would be £246,000. 

A short summary of the main thresholds is below, with the previous thresholds shown in italic text by way of comparison:

*2023-2024 thresholds

There are also changes to the thresholds for Utilities, with the threshold for contracts for supplies In addition, the thresholds under section 85(3) of the Procurement Act 2023 which relate to the restriction on the use of suitability questions for regulated below-threshold procurements have been reduced to match the supplies and services thresholds, from £138,760 to £135,018 for central government bodies and from £213,477 to £207,720 for sub-central government bodies.

If you would like to discuss this topic in more detail, please contact Fran Mussellwhite.