In the aftermath of the New Year, the United Kingdom has revealed the updated public procurement thresholds for 2024, showing small increases across various categories. The thresholds for work contracts and concessions for Central Government bodies, utilities, and other contracting authorities have risen from £5,336,937 to £5,372,609. Similarly, Supplies and Services contracts for Central Government bodies have also increased from £138,760 to £139,688; for utilities, from £426,955 to £429,809; and for other contracting authorities, from £213,477 to £214,904. Interestingly, the Light Touch Regime Services threshold remains unchanged at £663,540.
Procurement Thresholds in the Face of Inflation
Although these adjustments may seem insignificant at first glance, they hold significance amid inflation and rising costs in the UK. These minor changes imply the possibility of more contracts surpassing the thresholds, which include VAT.
The Procurement Act 2023: A Game Changer
Adding to the complexity is the upcoming enforcement of the Procurement Act 2023 in October 2024, which marks a significant departure from previous regulations and symbolizes the transformation of public procurement in the post-Brexit era. This act, designed to increase transparency, support smaller businesses, and promote public-private collaboration, introduces sweeping changes, including new procurement procedures, mandatory publishing notices, expanded supplier exclusion grounds, the establishment of a central debarment list, and clear standstill period durations.
Future of Public Procurement
Under the new act, contracting authorities will have greater flexibility, as new rules dictate public procurement processes. Understanding and adapting to the new act is crucial for those involved in public procurement, especially with the expectation of new competitions later in the year.
Simultaneously, starting from January 1st, 2024, HMRC has taken a significant step towards combating tax evasion by requiring digital platforms to automatically report individuals’ earnings. This directive applies to digital platforms in the UK that facilitate services or goods by UK or other taxpayers. With the rise in individuals earning from “side hustles,” HMRC’s automatic access is a strategic move to crack down on tax fraud. Platforms will now report directly to HMRC, reducing the risk of non-reporting or inaccurate reporting. The deadline for self-assessment registration was October 5th, 2023, and tax returns for income earned during 2022-23 must be paid by January 31st, 2024. Failure to disclose or wrongly disclose earnings may result in penalties, emphasizing the importance of this new regulation.
