UK: Changes to VAT capital goods scheme
Applicable from July 29, 2026
HMRC on July 8, 2026, published a policy paper explaining changes to the VAT capital goods scheme (CGS), including increasing the threshold for land, buildings, and civil engineering works from GBP 250,000 to GBP 600,000.
The changes also repeal the CGS category for computers, reflecting the reduced likelihood of the existing GBP 50,000 threshold being met.
Assets already within the CGS before the changes will remain subject to the scheme until the end of their adjustment period.
The amendments are implemented by the VAT (Amendment) Regulations SI 2026/765 and apply from July 29, 2026.
For more information, contact a KPMG tax professional in the UK:
Mark Weller | mark.weller@kpmg.co.uk
John Rippon | john.rippon@kpmg.co.uk
Gareth Blower | gareth.blower@kpmg.co.uk