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The Implementation from 1 April 2025 of New Profit Rates for Single Source Defence Contracts

14 March 2025

Proposing MP
Maria Eagle Lab
Liverpool Garston
Type
Written Ministerial Statement
Department
Ministry of Defence
View on Parliament.uk -->

At a Glance

Issue Summary

The statement is about the implementation of new profit rates for single source defence contracts from April 1, 2025.

Action Requested

The baseline profit rate will be increased to 8.56% and other related rates as per SSRO methodology, with a full explanation available on their website. The changes are published in the London Gazette and take effect on April 1, 2025.

Key Facts

  • Baseline Profit Rate for single source defence contracts is set at 8.56%.
  • Fixed Capital Servicing Rate increases to 3.64%.
  • Working Capital Servicing Rate rises to 4.69% on positive working capital employed and to 3.21% on negative working capital employed.
  • These rates come into effect from 1 April 2025.
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