The Government has announced the new procurement thresholds that will apply from 1 January 2022.
Procurement must be undertaken in line with the public or utilities procurement regime when the value of the procurement is above certain financial thresholds.
The financial thresholds are reviewed every two years and the current thresholds expire on 31 December 2021.
From 1 January 2022 the new thresholds will be inclusive of VAT (rather than net of VAT) and will be as follows:
Interestingly, the net impact of the VAT inclusive change means that, in real terms, where VAT is applicable to the contract, the thresholds have actually gone down rather than up.
You should note that these changes do not impact on any procurement that starts before 1 January 2022.
This change is currently laid before parliament in the Public Procurement (Agreement on Government Procurement) (Thresholds) (Amendment) Regulations 2021
We will issue a full update in the next few days exploring the full impact of this change.