Source: https://tendernation.io/glossary/procurement-thresholds Glossary # Procurement thresholds The contract values, including VAT, at or above which a public contract must follow the full competitive rules of the Procurement Act 2023. Updated 14 Oct 2026 Procurement thresholds are the contract values at or above which a public contract is fully covered by the Procurement Act 2023. Contracts below them follow the lighter [below-threshold](/glossary/below-threshold-contract) rules. Under the Act, thresholds include VAT. ## What it means [Section 3 of the Procurement Act 2023](https://www.legislation.gov.uk/ukpga/2023/54/section/3) makes a contract a "public contract" if, among other things, its estimated value is not less than the threshold amount in [Schedule 1](https://www.legislation.gov.uk/ukpga/2023/54/schedule/1). Buyers must value contracts using the rules in [section 4](https://www.legislation.gov.uk/ukpga/2023/54/section/4) and Schedule 3. Section 4(3) bars them from estimating a value with a view to avoiding the Act's requirements, and Schedule 3 includes anti-avoidance rules for related contracts. The amounts are revised every two years in line with the UK's international trade commitments. From 1 January 2026, under [the Procurement Act 2023 (Threshold Amounts) (Amendment) Regulations 2025](https://www.legislation.gov.uk/uksi/2025/1200/made) and [PPN 023](https://www.gov.uk/government/publications/ppn-023-2026-threshold-amounts/ppn-023-2026-threshold-amounts-html), the main thresholds including VAT are: Type of contractThresholdGoods, services or works for a central government authority£135,018Goods, services or works for a sub-central authority£207,720Works contracts£5,193,000Light touch contracts (other than concessions)£663,540Utilities contracts (not works or light touch)£415,440Works contracts use the works figure whichever type of buyer is involved. There are separate figures for defence and security contracts and concessions. These figures apply in England and Northern Ireland and to UK-wide reserved procurement; contracts regulated by the Welsh Ministers have their own column in Schedule 1. ## Why it matters for SMEs The threshold decides which rules apply, and that changes a lot for a bidder: which procedures can be used, how long you get to respond, whether you receive an [assessment summary](/glossary/assessment-summary) and whether there is a [standstill period](/glossary/standstill-period). ## Practical tip Do not guess from the headline figure in a notice. Check the buyer type and contract type, remember that thresholds include VAT, and look at the total value over the full contract term, including extensions. The [procurement threshold checker](/tools/procurement-threshold-checker) works this out for you. Find tenders that fit your business Search UK, EU and World Bank tenders in one place, get AI summaries and a fit score for each one, and track bids in a pipeline. Professional comes with a 14-day free trial, no card needed. [Browse live tenders](/opportunities)[Start free trial ](/register) 14-day free trial, no card required Browse by sector - [Construction work](https://tendernation.io/sectors/construction-work)356 - [Architecture, engineering & surveying](https://tendernation.io/sectors/architecture-engineering-surveying)131 - [IT services](https://tendernation.io/sectors/it-services)51 - [Business services](https://tendernation.io/sectors/business-services)171 - [Health and social work](https://tendernation.io/sectors/health-social-work)291 - [Sewage, refuse, cleaning & environmental](https://tendernation.io/sectors/sewage-refuse-cleaning-environmental)76 [All sectors ](/sectors) ## Nearby terms [Pipeline noticeAn annual notice from buyers spending over £100 million a year, listing contracts over £2 million they plan to tender in the next 18 months.](https://tendernation.io/glossary/pipeline-notice)[Preliminary market engagementConversations a buyer has with suppliers before publishing a tender, to shape its requirements, procedure and contract terms.](https://tendernation.io/glossary/preliminary-market-engagement)[Procurement Act 2023The UK law that has governed most public sector buying in England, Wales and Northern Ireland since 24 February 2025.](https://tendernation.io/glossary/procurement-act-2023)[Re-tenderA new procurement run for work that is already being delivered under a contract that is ending or being replaced.](https://tendernation.io/glossary/re-tender)[Reserved contracts (PPN 005)Competitions a buyer limits to certain kinds of supplier, such as local SMEs and VCSEs below threshold, or supported employment providers.](https://tendernation.io/glossary/reserved-contracts)[Selection questionnaire (SQ)A standard set of questions buyers use to check a supplier's eligibility, finances and capability before assessing its tender.](https://tendernation.io/glossary/selection-questionnaire) [Read our procurement guides ](/guides)