Capital goods scheme (CGS) ― what is covered?

Produced by a Tolley Value Added Tax expert

Value Added Tax

Guidance

This guidance note looks at the kinds of asset that are covered by the capital goods scheme (CGS).

For an overview of the CGS more broadly, see the Capital goods scheme (CGS) ― overview guidance note.

In-depth commentary on the CGS can be found in De Voil Indirect Tax Service V3.470.

In the Spring 2025 Tax Update, the government announced that it will simplify the Capital Goods Scheme by introducing the removal of computers from the assets covered by the scheme and increasing the capital expenditure value of land, buildings and civil engineering work to £600,000 (exclusive of VAT). This simplification will reduce the number of capital assets that would fall within the Capital Goods Scheme, therefore reducing the administrative burden on small businesses. The date of implementation of this change has not yet been confirmed.

What kinds of asset are covered by the capital goods scheme?

The CGS does not apply to all kinds of asset. In fact, it covers a relatively limited range of assets. These assets are often

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