Background subtraction-based techniques of moving object detection are very common in computer vision programs. Each technique of background subtraction employs image thresholding algorithms. Different thresholding methods generate varying threshold values that provide dissimilar moving object detection results. A majority of background subtraction techniques use grey images which reduce the computational cost but statistics-based image thresholding methods do not consider the spatial distribution of pixels. In this study, authors have developed a background subtraction technique using Lab colour space and used spatial correlations for image thresholding. Four thresholding methods using spatial correlation are developed by computing the difference between opposite colour pairs of background and foreground frames. Out of 9 indoor and outdoor scenes, the object is detected successfully in 7 scenes whereas existing background subtraction technique using grey images with commonly used thresholding methods detected moving objects in 1–5 scenes. Shape and boundaries of detected objects are also better defined using the developed technique.