UK business; activity, size and location: 2019

UK businesses broken down by legal status, industry, region, employment and turnover size bands.

Nid hwn yw'r datganiad diweddaraf. Gweld y datganiad diweddaraf

This is an accredited National Statistic. Click for information about types of official statistics.

Cyswllt:
Email Rhys Hopkins

Dyddiad y datganiad:
2 October 2019

Cyhoeddiad nesaf:
To be announced

1. Main points

  • The number of Value Added Tax (VAT) and/or Pay As You Earn (PAYE) businesses in the UK, as of March 2019, increased to 2.72 million, an increase of 1.8% from March 2018 and a slight recovery from the minimal increase seen between 2017 and 2018.

  • The number of companies and public corporations has continued to rise and represents 72.5% of total UK businesses, which has offset a gradual fall in sole proprietors and partnerships.

  • The largest industry group is professional, scientific and technical, making up 17.4% of all registered businesses in the UK.

  • London remained the region with the largest number of businesses, representing 19.2% of the UK total.

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2. Things you need to know about this release

UK business; activity, size and location, 2019 is produced from an extract taken from the Inter-Departmental Business Register (IDBR) recording the position of businesses as at 15 March 2019.

This publication represents the businesses registered with HM Revenue and Customs (HMRC) for Value Added Tax (VAT) and/or Pay As You Earn (PAYE). The Department for Business, Energy and Industrial Strategy (BEIS) produces Business Population Estimates that seek to provide full coverage of all types of businesses in the UK, including an estimate of the unregistered business population.

For the purpose of this statistical bulletin the term “business” is used to represent an enterprise. An enterprise can be defined as the smallest combination of legal units (generally based on VAT and/or PAYE records) that is an organisational unit producing goods or services, which benefits from a certain degree of autonomy in decision-making, especially for the allocation of its current resources. An enterprise carries out one or more activities at one or more locations. An enterprise may be a sole legal unit.

Please note the figures in the statistical bulletin tables use disclosure methods and are rounded individually. Therefore, the sum of component items may be slightly different to the totals shown.

To support this release, datasets are available in an Excel Workbook and at NOMIS in greater geographical and industrial detail. Please note for various reasons, multiple business registrations can be recorded at a single address and this can distort data for smaller geographical areas.

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3. Economic context

The number of VAT (Value Added Tax) and/or PAYE (Pay As You Earn) businesses in the UK as of March 2019 increased to 2.72 million, an increase of 1.8% from March 2018. This increase is despite the ease in the growth of gross domestic product (GDP) in recent years. The chained volume measure (CVM) of GDP increased by 1.4% in 2018, down from an increase of 1.8% in 2016 and 2017. This growth in the number of businesses was despite the heightened uncertainty surrounding the UK’s exit from the European Union.

Brexit-related uncertainty has been cited by businesses, with the Confederation of British Industry (CBI), Bank of England, and The Institute of Chartered Accountants in England and Wales (ICAEW) all reporting muted confidence as the political situation continues to be ambiguous. The Bank of England has kept the bank rate steady at 0.75% since August 2018. Despite these challenges business activity has increased in the past year, although the growth in activity has remained cautious.

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4. Corporate businesses see an increase as sole proprietors and partnerships continue to fall

Between March 2018 and March 2019, there was an increase of 3.3% in corporate businesses (companies and public corporations). This coincides with continued increase in employment in recent years. The decrease in sole proprietors and partnerships has continued but has slowed down to 2.2% compared with 2.9% last year.

Corporate businesses represented 72.5% of total businesses, an increase of 1.1 percentage points from 71.4% in 2018. Sole proprietors represented 16.3% of total businesses, a slight decrease in percentage points down 0.6% from 16.9% in 2018. Partnerships represented 7.5% of total businesses and business counts were down 0.4 percentage points from 7.9% in 2018. General government and non-profit making bodies dropped by 0.1 percentage point to 3.7% of total businesses.

Of the 1.97 million corporate businesses, 45.7% are single employee limited companies. In 2019 the number of these businesses increased by 28,000. The largest number of these single employee companies are carrying out management consultancy activities (other than financial management).

Between 2018 and 2019 around 9,000 businesses moved from sole proprietors or partnerships to corporate businesses. The three largest industries in this group were food and beverage service activities, specialist construction, and retail trade, except of motor vehicles and motorcycles, making up 42.8% of the 9,000. This group accounted for 13.4% of the growth in corporate businesses between 2018 and 2019, so the majority of the 64,000 increase can be seen as new registrations, showing a trend in businesses going straight to limited status rather than moving through a sole proprietor or partnership status first. Digital registration, formation agents and virtual offices are making the process of setting up limited companies easier and more cost effective, contributing to this trend.

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5. The largest growth in numbers is in the construction industry

The professional, scientific and technical industry accounted for the largest number of businesses with 17.4% of all registered businesses in the UK, and accounted for 7.5% of the UK economy. The largest number of businesses in this industry is management consultancy followed by computer consultancy.

The largest growth in numbers continues to be in construction, which has risen by 12,000 businesses between 2018 and 2019. The largest contributor to this industry is construction of domestic buildings.

The second largest growth in numbers was seen in the information and communication industry, which had an increase of 7,000 businesses.

Property, and finance and insurance had the strongest percentage growth of 4.1% and 3.8% respectively.

The education industry showed the biggest fluctuation in growth when compared with the previous period. There was an increase of 1.2% between 2018 and 2019 compared with a reduction of 9.0% between 2017 and 2018.

Apart from health, all industries that showed negative growth last year showed positive growth this year. Even though the health industry showed a negative growth of 5.9%, this was an improvement on last year’s decrease of 9.7%.

We observed that the decreases in health last year coincided with the amendment made by HMRC to the Intermediaries Legislation (IR35) concerning “off-payroll” working in the public sector. This year still sees a decline in one-person limited companies in the health industry.

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6. Most regions in the UK saw increases in the number of businesses

Between 2017 and 2019, the number of Value Added Tax (VAT) and/or Pay As You Earn (PAYE) businesses in London as a proportion of all regions increased by 0.3 percentage points, from 18.9% in 2017 to 19.2% in 2019. Whereas the proportion of VAT and/or PAYE businesses in both the East of England and the South West decreased by 0.2 percentage points.

London, which accounts for around 24% of gross value added (GVA) for the UK, made up the largest number of businesses in March 2019, with 19.2% of the UK total.

The South East, the region with the next largest share of GVA at around 15%, also had the second highest share of businesses at 15.3%.

Table 2 provides the number of businesses in every region and the percentage contribution of each region to the UK total.

All regions showed an increase in the numbers of registered businesses apart from the North West. London experienced the greatest percentage increase of 3.2% between 2018 and 2019, representing around 16,000 businesses. In 2018 Northern Ireland represented the highest percentage increase of 3.4%. In 2019 the North West region saw the only regional decrease of 0.4%, around 1,000 businesses.

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7. Only 2.2% of businesses operate more than one site

Local units are individual sites that belong to a business. In March 2019, there were 3.18 million local units belonging to Value Added Tax (VAT) and/or Pay As You Earn (PAYE) based businesses, a rise of 1.5% in contrast to 2018, where local units showed an increase of just 0.1%.

Out of the 2.72 million VAT and/or PAYE businesses, only 60,000 (2.2%) operate from more than one site. These operated a total of 522,000 local units between them.

Of the businesses with one site, the largest number are within the professional, scientific and technical, and construction sectors compared with the businesses with 20 or more sites where the largest number are in the health and retail sectors.

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8. Quality and methodology

The UK business: activity, size and location Quality and Methodology Information report contains important information on:

  • the strengths and limitations of the data and how it compares with related data

  • quality characteristics

  • users and uses of the data

  • how the output was created

  • accessibility and characteristics

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Manylion cyswllt ar gyfer y Bwletin ystadegol

Rhys Hopkins
idbrdas@ons.gov.uk
Ffôn: +44 (0)1633 456902