From 29 July 2026, the Capital Goods Scheme (CGS) will be simplified. The CGS requires businesses to make adjustments to the VAT claimed on certain high-value assets over a number of years. The changes will reduce the number of assets that fall within the scheme and remove the need for many businesses to carry out complex CGS calculations.
The two significant changes to the scheme are as follows:
- Computers and any computer equipment will no longer be covered by the CGS, regardless of value
- The expenditure threshold for land, buildings and civil engineering works will increase from £250,000 to £600,000 (excluding VAT)
These changes aim to reduce the administrative burden on the VAT system and on small businesses that are subject to the scheme’s calculations. The new rules apply where capital expenditure is incurred on or after 29 July 2026. Assets already within the CGS before that date will continue to be subject to the rules prior to this change.
Changes to VAT rules are applied in the Island in alignment with the Customs and Excise Agreement 1979. You can find additional information relating to the changes on gov.uk.
If you require further guidance or advice, please contact us on:
Email: customs@gov.im
Telephone: +44 1624 648100
(Monday to Friday 8.30am to 4.30pm)
