The number of UK small businesses has grown by 1 million since 2010, according to new official figures that reveal the total number of private sector firms in the UK has hit a record 5.5 million. The figures also show that self-employment is a growing trend.
The latest national statistics, based on estimates for the start of 2016, also show that the number of medium-sized businesses in the UK has swelled by 4,000, and large businesses by 900, over the same period.
The figures reveal another first: London can now claim to be home to 1 million businesses.
The new national statistics show that self-employment accounts for the largest part of the UK’s business population. Image: pixabay
Altogether, from 2010-2016, the total number of businesses in the UK has grown by 23 percent, says the new Business Population Estimates 2016 report, published on Thursday.
‘Heroes of Britain’s economic revival’
Greg Clark, secretary of state for business, energy, and industrial strategy, welcomed the news. He said:
“Britain’s businesses are the heroes of our economic revival and it is great to see the number of businesses rise by over a million since 2010.”
A large business is defined as one that employs 250 or more workers. A small business is an enterprise that employs 0-49 workers, while a medium-sized business is one with 50-249 employees. Both come under the umbrella term SME – small and medium-sized enterprise.
The report shows that SMEs account for at least 99 percent of businesses in every main industry sector.
The new estimates calculate UK’s business population by adding the actual number of businesses registered for VAT and PAYE to an estimate of the number of businesses that are not (using sources ONS Labour Force Survey and data from HMRC).
Growth is defined as the net annual change – after start-ups, closures, takeovers, and mergers are taken into account. Essentially positive growth means more businesses have started than closed.
Self-employment outpacing other forms
The new figures also show that as of early 2016:
– SMEs account for 99.9 percent of all private sector firms, the vast majority of which are small businesses (99.3 percent of all private firms)
– Self-employment accounts for the largest part of the business population: 3.7 million businesses (68 percent) are run as sole proprietorships or partnerships
– In the last year, the UK private sector business population swelled by 97,000 (2 percent growth)
– Of these, non-employing businesses outpaced employing businesses (2 percent versus 1 percent growth).
The government has announced they are launching a new review to look at how employment rules may need to change as more and more people adopt self-employment as a way of working in the modern economy.
The self-employed sector has been driving much of the growth seen in the UK economy in recent years, according to an independent review published earlier this year.
The review, by Julie Deane, CEO & Founder of the Cambridge Satchel Company, revealed that the number of self-employed in the UK stands at “an all-time high” of 4.6 million, or 15 percent of the nation’s workforce.