Procurement Policy Note 10/21 – Thresholds and Inclusion of VAT · first published 6 December 2021
Procurement Policy Note (PPN) 10/21, published December 2021, does two things: it sets new monetary threshold values under the main UK public procurement regulations (Public Contracts Regulations 2015, Utilities Contracts Regulations 2016, Concession Contracts Regulations 2016, and the Defence and Security Public Contracts Regulations 2011), and it changes how buyers must estimate contract values — they must now include VAT (Value Added Tax) when working out whether a contract is above or below those thresholds. The change to VAT inclusion is a methodology shift for buyers, not suppliers. Crucially, the PPN states this change does not require any change to the publication of procurement notices, so the notices you see as a bidder will look the same. Because we only have the summary text and not the full PDF, the exact new threshold figures are not available in this brief.
WHO THIS APPLIES TO
THE ENKII VIEW
The VAT-inclusive methodology means some contracts that previously sat just below a threshold may now sit above it, potentially triggering fuller competition rules and opening more formally advertised opportunities to SMEs (small and medium-sized enterprises). However, without the full document we cannot confirm the precise new threshold figures — small businesses should download PPN 10/21 directly from GOV.UK to verify the exact numbers before relying on them. This is primarily a buyer-side administrative change, so the direct action required of suppliers is low, but understanding where thresholds sit affects which contracts must be openly advertised.
1. Download the full PPN 10/21 PDF from GOV.UK to confirm the exact new threshold figures — this brief cannot provide them as the PDF was not parsed.
All SMEs bidding for public contracts — The PPN sets new threshold values under four sets of regulations; knowing the precise figures tells you which contracts must be formally advertised and therefore open to competitive bids.
2. Be aware that buyers are now required to count VAT when assessing contract value against thresholds — a contract you previously assumed fell below the threshold may now sit above it, meaning it should be formally advertised and accessible to you.
SMEs monitoring tender pipelines — The PPN explicitly changes the methodology for estimating contract values to be inclusive of VAT for the purposes of applying the thresholds, which can push borderline contracts over the line into mandatory open competition.
Every rule below quotes the official document verbatim.
New threshold values are set for the Public Contracts Regulations 2015, Utilities Contracts Regulations 2016, Concession Contracts Regulations 2016, and the Defence and Security Public Contracts Regulations 2011 — exact figures are in the PDF not available here. (All in-scope contracting authorities across all four sets of regulations.)
“This PPN provides advanced notification of the new threshold values to apply for the purposes of the Public Contracts Regulations 2015, Utilities Contracts Regulations 2016, Concession Contracts Regulations 2016 and the Defence and Security Public Contracts Regulations 2011.”
Contract values must now be estimated inclusive of VAT when determining whether a contract meets or exceeds a regulatory threshold. (All contracting authorities using the four sets of regulations listed above.)
“This PPN also sets out a change to the methodology for estimating contract values to be inclusive of VAT for the purposes of applying the thresholds.”
The VAT-inclusive valuation change does not require any alteration to how procurement notices are published. (All contracting authorities — procurement notice format/content is unaffected.)
“This does not require a change to the publication of procurement notices.”
This briefing is enkii's interpretation of the official document — the official text always governs.
Source document © Crown copyright, reused under the Open Government Licence v3.0 via the GOV.UK Content API. enkii tracks every Procurement Policy Note and briefs changes the day they land — see all briefings.