Policy paper

Revenue and Customs Brief 7 (2026): Changes to the VAT Capital Goods Scheme

This brief explains the changes made to the items covered by the VAT Capital Goods Scheme.

• From: HM Revenue & Customs
• Published: 30 July 2026

Documents

Changes to the VAT Capital Goods Scheme

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Details

This brief explains changes to the VAT Capital Goods Scheme that take effect from 29 July 2026. Capital items already covered by the scheme will remain in it until their normal adjustment periods end.

The changes will:

• remove computers and computer equipment from the scheme
• increase the threshold for land, buildings and civil engineering works from £250,000 to £600,000, excluding VAT
• leave the rules for aircraft, ships, boats and other vessels unchanged
• reduce the administrative burden on small businesses

Published 30 July 2026