The number of VAT-based enterprises in the UK increased by 1.2 per cent between 2004 and 2005, to just over 1.6 million - a trend reported by HM Revenue & Customs.
The average annual growth in VAT-based enterprises was 2.0 per cent between 1984 and 1991. This was followed by an average fall of 2.4 per cent a year between 1992 and 1996. There was then a return to growth, although at a slower rate than in the late 1980s.
In 2005, 49 per cent of VAT-based enterprises were corporate businesses (companies and public corporations), 31 per cent sole proprietors, 18 per cent partnerships and 2 per cent general government and non-profit making bodies. Company registrations have seen large growth since the mid 1990s balanced by a decrease in sole proprietors and partnerships. This reflects the trend reported by Companies House.
The property and business services sector accounts for the largest number of VAT-based enterprises with 28 per cent of all units registered in 2005. This is followed by construction (12 per cent) and retail (11 per cent).
Source: Inter Departmental Business Register (IDBR), Office for National Statistics
Notes: The decline in stock of UK VAT-based enterprises between 1992 and 1996 should be interpreted with caution. In 1991 and 1993 the VAT registration threshold was increased above the rate of inflation resulting in a reduction in new registrations, denoted by a break in the link in the graph. In addition to this many businesses fell below the registration level resulting in an increase in de-registrations.
The counts include businesses below the VAT threshold, representing voluntary registrations and businesses with zero turnover.
Interactive data showing the geographic distribution of local units (sites) by activity; and the stock of businesses by activity over time can be accessed using the links on the right hand side.