Page updated 30 Apr 2012
The Capital Charge ensures that prices for goods and services produced by government departments reflect full production costs; allows comparison of the costs of output production with those of other producers (whether in the public or private sector); and creates an incentive for departments to make proper use of working capital and to dispose of surplus fixed assets.
Treasury Circular 2011/04: March Baseline Update 2011: Changes to the Capital Charge Rate outlines the current capital charge rate.
The current capital charge rate for 2011/12 is 8%.
Treasury Circular 2001/16: Capital Charge: Formula and Rates for 2002/03 outlines the formula for calculating the capital charge rate.