UK public procurement thresholds will change on 1 January 2026 after ministers signed The Procurement Act 2023 (Threshold Amounts) (Amendment) Regulations 2025 (SI 2025/1200). The instrument, made on 18 November and laid on 21 November, updates Schedule 1 and corrects an earlier omission in section 85.

The headline numbers move down slightly for most categories. Works contracts fall to £5,193,000; concession contracts and utilities works also move to £5,193,000; supplies and services for central government drop to £135,018; for sub‑central authorities to £207,720; utilities supplies and services to £415,440. Light‑touch services stay at £663,540, while light‑touch concession contracts remain at £5,372,609. All figures are inclusive of VAT.

This update keeps the regime aligned with the UK’s commitments under the WTO Government Procurement Agreement. Cabinet Office guidance confirms thresholds are reviewed every two years to reflect currency movements, and that the sterling thresholds are VAT‑inclusive when estimating contract value.

There’s also a tidy‑up to the below‑threshold rulebook. Section 85(3) is corrected to swap the old figures (£138,760 and £213,477) for £135,018 and £207,720. The Cabinet Office notes this aligns section 85 with the Schedule 1 table (rows 11 and 12) after an earlier oversight when thresholds were last updated.

Wales is handled separately. The Schedule now distinguishes contracts regulated by the Welsh Ministers from all other contracts, but this UK statutory instrument does not set the Welsh figures; a separate Welsh instrument will do so. If you bid into devolved Welsh authorities, watch for that publication.

The cut‑over is straightforward. Procurements that have ‘commenced’ before 1 January 2026 keep the current thresholds. That covers the publication of a tender notice or transparency notice, a below‑threshold tender notice, an invitation to tender for a regulated below‑threshold contract, or direct contact with a supplier to begin awarding a below‑threshold contract.

For bid strategy, treat these figures as gates. A £136,000 (inc VAT) IT support contract advertised by a central department on or after 1 January will now sit above the new central threshold (£135,018) and use the full regime; the same value at a district council would sit just below the sub‑central threshold (£207,720) and follow the below‑threshold route.

Utilities face a similar recalibration. A water company letting a £420,000 (inc VAT) supplies contract from January will cross the updated utilities threshold (£415,440) and require a regulated process; a £5.2m works package exceeds the new works threshold (£5,193,000). Light‑touch services remain at £663,540.

For SMEs and bid teams, the practical steps are simple: re‑base your pipeline values on VAT‑inclusive estimates; revisit bid/no‑bid triggers that sit close to the new numbers; and confirm in clarifications which threshold set an authority is using for competitions that straddle year‑end. Avoid artificial splitting of requirements to stay below a threshold - authorities are expected to spot and prevent it.

Finally, note the territorial position. The instrument was made with the consent of the Department of Finance for Northern Ireland, so the updated UK thresholds apply there; Wales will confirm its own figures separately. For primary reference, rely on the text on legislation.gov.uk and the Cabinet Office’s published guidance.