99.3%
0.6%
0.1%
48%
13%
40%
36%
15%
48%
0%
50%
100%
Small
Medium
Large
Businesses
Employment
Turnover



STATISTICAL RELEASE





BUSINESS POPULATION ESTIMATES FOR THE UK AND REGIONS 2018



Publication date:
11 October 2018

Next Updated:
Autumn 2019

Coverage: UK

For further detail:
https://www.gov.uk/governm
ent/collections/business-
population-estimates

Lead Statistician:
Oliver Wright
business.statistics@beis.gov.uk
020 7215 8284

Department for Business,
Energy & Industrial Strategy
5
th
Floor Victoria
1 Victoria Street
London SW1H 0ET
Summary
There were 5.7 million private sector businesses at the
start of 2018.
Compared with the previous year, the private sector
business population fell by 0.5% (-27,000 businesses)
whilst conversely private sector employment increased by
2% (+304,000).
This contrast is attributable to the number of smaller non-
employing businesses falling by 1% (-50,000) but the
number of larger employing businesses rising by 2%
(+23,000).
The decrease in the business population is the first fall in
the series, which started in 2000. However, there were still
2.2 million (+63%) more businesses than in 2000.

SMEs and the Economy
Small businesses accounted for 99.3% of all private sector
businesses at the start of 2018 and 99.9% were small or
medium-sized (SMEs).
Total employment in SMEs was 16.3 million; 60% of all
private sector employment in the UK.
The combined annual turnover of SMEs was 2.0 trillion,
52% of all private sector turnover.
Figure 1: Contribution of different sized businesses to total
population, employment and turnover, at start of 2018




















Page 1 of 16
Business Population Estimates 2018
Page 2 of 16




Composition of the business population


In 2018 there were 1.4 million employing businesses and 4.3 million non-
employing businesses. Therefore, 75% of businesses did not employ anyone aside
from the owner(s).

The overall business population includes three main legal forms: there were 3.4
million sole proprietorships (59% of the total), 1.9 million companies (34%), and
405,000 ordinary partnerships (7%).

Of the 5.7 million businesses, 45% (2.6 million) were registered for VAT or PAYE.

Trends in the business population

Between 2000 and 2017, there was sustained growth in the business population
each year but most recently there has been a fall of 27,000 businesses (-0.5%)
between 2017 and 2018. Nonetheless, there were still 2.2m (+63%) more
businesses than in 2000.

The majority of population growth since 2000 has been due to non-employing
businesses, which accounted for 87% of the overall increase.

Between 2017 and 2018, whilst the number of employing businesses
increased by 23,000, non-employing businesses fell by 50,000, resulting in
an overall decrease of 27,000 businesses.

The number of companies has increased in the last year by 31,000 (+2%) whilst
the number of sole proprietorships and ordinary partnerships fell by 49,000 (-1%)
and 9,000 (-2%) respectively.

Locations and industries

The number of businesses per person (business density) is higher in
southern England than elsewhere in the UK.

SMEs account for at least 99.5% of the businesses in every main industry sector.

Nearly a fifth of all SMEs operate in Construction, compared with less than 1% in
the Mining, Quarrying and Utilities sector.


Contents

3
Introduction

3
Composition of the 2018 business population

4
Legal form

5
Registration for VAT and PAYE

5
Trends in the business population

8
UK countries and regions

11
Industries

14
Notes for this release
Business Population Estimates 2018
Page 3 of 16



Introduction

1. The Business Population Estimates (BPE) for the UK and Regions 2018 provides
information on the number of private sector businesses in the UK at the start of
2018, broken down by number of employees, legal status, industry and geography.
The publication:
measures the net change in the number of private sector businesses, but
cannot be used to estimate numbers of business start-ups or closures

reports on businesses in the private sector figures in this release exclude the
government and not-for-profit sectors; an overview of the number of businesses
in the whole economy is provided in Table 2 of the detailed tables
comprises this statistical release, a set of detailed tables and a
'methodology and quality' note, which are all available on gov.uk

Composition of the 2018 business population

2. The UK private sector is dominated by non-employing businesses and small
employers, and SMEs account for 99.9% of the business population (5.7 million
businesses). At the start of 2018:

there were an estimated 5.7 million UK private sector businesses
1.4 million of these had employees and 4.3 million had no employees

therefore, 75% of businesses did not employ anyone aside from the owner(s)

there were 5.6 million small businesses (with 0 to 49 employees), which is
99.3% of the total business population

there were 35,000 medium-sized businesses (with 50 to 249 employees),
representing 0.6% of the total business population
a further 7,500 businesses were large businesses (with 250 or more
employees), which is 0.1% of the business population


Table A: Estimated number of businesses in the UK private sector and their
associated employment and turnover, by size of business, start of 2018


Businesses
Employment
thousands
Turnover
1

millions

All businesses

5,667,510

27,027

3,861,613

SMEs (0-249 employees)


5,660,000

16,284

1,993,507
Small businesses (0-49 employees)
5,625,165
12,885
1,398,503

With no employees
2


4,278,225

4,643

274,917
All employers
of which:
1-9 employees

1,389,285

1,137,290
22,384

4,159
3,586,696

533,323
10-49 employees

209,650
4,083
590,263
50-249 employees

34,835
3,399
595,004
250 or more employees
7,510
10,743
1,868,106
1. Total turnover figures exclude Section K (financial and insurance activities) where turnover is not available on a comparable
basis.
2: "With no employees" includes sole proprietorships and partnerships with only the self-employed owner-manager(s), and
companies with a single employee, who are assumed to be directors.
Business Population Estimates 2018
Page 4 of 16




3. The 7,500 large businesses in the UK make a major contribution to employment
and turnoveri. Nonetheless, SMEs account for three fifths of the employment and
around half of turnover in the UK private sector. At the start of 2018:

total employment in SMEs was 16.3 million (60% of the total), whilst turnover
was estimated at 2.0 trillion (52%)
employment in small businesses was 12.9 million (48%) and turnover 1.4
trillion (36%)
employment in medium businesses was 3.4 million (13%) and turnover
0.6 trillion (15%)
employment in large businesses was 10.7 million (40%) and turnover 1.9
trillion (48%)

further information on composition is in Table A, and Table 1 in the detailed
tables


Legal form

4. There are three main legal forms of businesses in the private sector; sole
proprietorships, ordinary partnerships, and companies. Although sole
proprietorships are the most common legal form, companies now account
for a third of private sector businesses. At the start of 2018:

the UK private sector business population comprised 3.4 million sole
proprietorships (59% of the total), 1.9 million actively trading companiesii (34%)
and 405,000 ordinary partnerships (7%)
1.0m companies were employersiii, as were 248,000 sole proprietorships
and 114,000 ordinary partnerships
3.1 million sole proprietorships, 883,000 companies and 291,000 ordinary
partnerships did not employ anyone aside from the owner(s)

further information on legal form is in Figure 2, and Table 3 of the detailed
tables






















i
See 'Notes on this Release' and the accompanying Methodology and Quality Note for details of time lags
associated with employment and turnover data.
ii
Companies can take a range of legal forms, including Public Limited Companies, Private Limited Companies,
Limited Liability Partnerships, and others. ONS's Inter-Departmental Business Register only counts actively trading
companies, rather than all those recorded on the Companies House register.
iii
In this publication companies with a single employee director are treated as having no employees. See
Definitions and Coverage section of the Methodology and Quality Note for more information.
Business Population Estimates 2018
Page 5 of 16



Figure 2: Number of businesses in the UK private sector with and without
employees, by legal status, start of 2018













Registration for VAT and PAYE

5. Three quarters of UK private sector businesses are non-employers, and the
majority of these are not registered for either VAT or PAYE. At the start of 2018:

the Office for National Statistics recorded 2.6 million private sector businesses
as registered for VAT or PAYEiv, 45% of the estimated total population
3.1 million businesses (55%) traded without being registered for VAT or PAYE
and are classified here as 'un-registered'
13% of sole proprietorships and 52% of partnerships were registered for VAT or
PAYE


Trends in the business population

6. Apart from between 2017 and 2018, there has been sustained growth in the total
business population each year since 2000, with an overall increase of almost two-
thirds. Between 2000 and 2018:

the business population increased by 2.2 million (+63%)

the average rate of annual growth in the business population was +3%

the highest rate of increase was +7% between 2003 and 2004, and between
2013 and 2014

in contrast there was a decrease in the business population (for the first time in
the series) between 2017 and 2018 (-0.5%) and very little growth took place
between 2004 and 2005 (+0.03%)

further information on trends is in Figure 3 and Table B in this release




iv
This total will differ slightly from ONS published statistics on VAT/PAYE registered businesses (e.g. UK Business
and Business Demography) refer to the User Guide for more information.
0
0.5
1
1.5
2
2.5
3
3.5
4
Ordinary
Partnerships
Companies
Sole proprietorships
Number of businesses (millions)
No employees
With employees
Business Population Estimates 2018
Page 6 of 16


3.5 3.5 3.6
3.7
3.9 3.9
4.1 4.3
4.3 4.4
4.5 4.6
4.8 4.9
5.2 5.4
5.5
5.7 5.7
0.0
1.0
2.0
3.0
4.0
5.0
6.0
millions































7. In the last year the UK private sector business population decreased by
27,000, or 0.5%. The number of non-employing businesses fell by 1% but the
number of employing businesses grew by 2%. Between 2017 and 2018:

there were 50,000 fewer (-1%) non-employing businesses but 23,000 more
(+2%) employing businesses

the net change in the business population is determined by the balance of new
business start-ups (inflows) against those businesses that closed, merged or
were taken over by another business (outflows)

further information on detailed trends is in Figure 5 and Table B


Figure 4: Growth in the number of UK private sector businesses by size band,
2000 to 2018 (index: base year=2000)




182
125
130
105
80
100
120
140
160
180
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Base year 2000=100
With no employees
Medium employers
Small employers
Large employers
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Figure 3: UK private sector business population, 2000 to 2018

Business Population Estimates 2018
Page 7 of 16




8. Growth in the UK private sector business population since 2000 has been mainly
due to increasing numbers of non-employing businesses. Since 2000:
overall, the number of non-employing businesses has increased by 1.9 million
(+82%)
overall, the number of employing businesses has increased by 278,000 (+25%)
non-employing businesses accounted for 87% of total growth over the period


Figure 5: Non-employing and employing businesses in the UK private sector,
2000 to 2018






















9. Overall the number of SMEs has increased by 2.2 million (+64%) since 2000,
including 278,000 SME employers (+25%). Over this period:

the number of small employing businesses grew by +25%

the number of medium-sized employers grew by +30%

the number of large businesses grew by +4%

further information on detailed trends is in Figure 4 and Table B


10. There was a fall in the number of sole proprietorships and ordinary
partnerships over the year whilst the number of actively trading companies
increased. Looking at the period between 2010 and 2018:
overall, the number of sole proprietorships grew by 594,000 (+22%) and the
number of companies increased by 641,000 (+50%)

in contrast, the number of ordinary partnerships fell by 51,000 (-11%)

the number of VAT/PAYE registered businesses grew by 453,000 (+21%) and
the number that were unregistered increased by 732,000 (+31%)

further information on trends is in Figure 6, and Table 27 in the detailed tables
0.0
1.0
2.0
3.0
4.0
5.0
6.0
millions
With employees
No employees
All private sector
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Business Population Estimates 2018
Page 8 of 16



Figure 6: Percentage change in the number of VAT/PAYE registered and un-
registered businesses by legal form, 2017 to 2018

11. In terms of employment trends:

total employment across all private sector businesses increased from 26.7
million at the start of 2017 to 27.0 million at the start of 2018. This represented a
rise of 2% or 304,000 people.

the SME share of total employment was 60% in 2018 and the proportion has
remained the same since 2014.

total employment in SMEs increased from 16.1 million at the start of 2017 to
16.3 million at the start of 2018. This represented a rise of 1% or 138,000
people.

further information on employment trends is in Table 28 of the detailed tables


UK countries and regions

12. Private sector businesses are not evenly distributed across the UK. Based on head
office location, London and the South East of England have considerably more
businesses than any other UK country or region of England. At the start of 2018:

there were 5.0 million private sector businesses in England, 331,000 in
Scotland, 199,000 in Wales, and 133,000 in Northern Ireland
London (1.1 million) and the South East of England (874,000) had the most
private sector businesses, accounting for 35% of the UK business population

the North East of England had 163,000 private sector businesses, the least of
any English region

this is head office location, rather than location of specific branches/sites

further information on location is in Table 9 of the detailed tables


13. Along with the South West, London and the South East of England also had the
highest business density rates in the UK, based on the size of the resident adult
population. At the start of 2018:
London (1,563) had the highest number of businesses per 10,000 resident
adults

there were also relatively high rates in the South West of England (1,192),
the South East of England (1,190) and the East of England (1,134)
-4%
-3%
-2%
-1%
0%
1%
2%
Sole proprietorships Ordinary partnerships
Companies
Total
% change
Registered businesses
Unregistered businesses
Total
Business Population Estimates 2018
Page 9 of 16





the North East of England had the lowest business density rate (749) of any
English region or UK country
Scotland (735), Wales (774), Northern Ireland (897), Yorkshire and the Humber
(908), North West (927), East Midlands (946) and West Midlands (951) also
had lower business density rates

further information on business density is in Figures 7 and 8, and Table 8 in the
detailed tables


Figure 7: Number of businesses and business density rate in the private sector by
English region and UK country, start of 2018




14. For regions and countries below UK level there is some volatility in estimates of
year on year change. Looking in the longer term:

the biggest percentage increase in the number of businesses (head offices)
since 2010 was +53% in London

the smallest percentage increase in England since 2010 was +19% in the South
East

the number of businesses has increased in all the UK countries and regions
since 2010

further information on regional trends is in Table 26 of the detailed tables
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
0
200
400
600
800
1,000
1,200
LondonSouth EastEast of EnglandNorth WestSouth WestWest MidlandsYorkshire & the HumberEast MidlandsNorth EastScotlandWalesNorthern IrelandBusinesses per
10,000 adults
(density)
Thousands
Bars relate to business population (left hand axis)
Red diamonds relate to business density (right hand axis)
Business Population Estimates 2018
Page 10 of 16




Figure 8: Number of businesses in the UK private sector per 10,000 adults, UK
region and country, start of 2018


Business Population Estimates 2018
Page 11 of 16




Industries

15. SMEs account for at least 99.5% of the overall population in each of the main
industry sectors and are therefore distributed similarly to the business population
overall. At the start of 2018:

just under a fifth (1.0 million) of all SMEs were operating in Construction,
compared with less than 1% in the Mining, Quarrying and Utilities sector

there were also a considerable number of SMEs operating in the Professional,
Scientific and Technical Activities (816,000 or 14%), and Wholesale and Retail
Trade and Repair sectors (555,000 or 10%)

there were 34,000 SMEs in Mining and Quarrying and Utilities


16. Although Construction is the largest industrial sector in terms of SME numbers,
Wholesale and Retail Trade had the highest share of both SME employment and
turnover. At the start of 2018:
Wholesale and Retail Trade and Repair accounted for 14% of all SME
employment and a third of SME turnover in the UK private sector
almost a third of SME turnover was spread across three more sectors:
Construction (12%), Manufacturing (9%) and Professional, Scientific and
Technical (11%)

further information for industries is in Figure 9, and Table 5 in the detailed
tables
Business Population Estimates 2018
Page 12 of 16




Figure 9: Share of SME numbers, SME employment and SME turnover by
industrial sector, start of 2018








0%
5%
10%
15%
20%
25%
30%
35%
A Agriculture, Forestry and Fishing
B, D and E Mining and Quarrying,
and Utilities
C Manufacturing
F Construction
G Wholesale and Retail Trade; Repair
of Motor Vehicles and Motorcycles
H Transportation and Storage
I Accommodation and Food Service
Activities
J Information and Communication
K Financial and Insurance Activities *
L Real Estate Activities
M Professional, Scientific and
Technical Activities
N Administrative and Support
Service Activities
P Education
Q Human Health and Social Work
Activities
R Arts, Entertainment and
Recreation
S Other Service Activities
* Turnover figures exclude Section K (financial and insurance activities) where turnover is not
available on a comparable basis
Share of SME businesses
Share of SME Employment
Share of SME Turnover



Business Population Estimates 2018

Table B: Estimated number of businesses in the UK private sector, start of 2000 to start of 20181, 2 (thousands)


1. Table 25 in the detailed tables for the release provides more information about the change in the business population between 2000 and 2018.

Table C: Changes in the number of businesses, by legal status, between the start of 2017 and the start of 2018






Sole proprietorships
Ordinary Partnerships
Companies
Total



Change







Unregistered businesses1

-35,000
-3,000
N/A2
-38,000







Registered businesses3

-14,000
-6,000
31,000
11,000








Of which
with employees
-10,000
-6,000
38,000
22,000


without employees
-4,000
-
-7,000
-12,000







All private sector businesses
-49,000
-9,000
31,000
-27,000

1. Unregistered businesses comprise self-employed people working alone or in partnership.
2. Not applicable - the BPE methodology assumes all companies are registered.
3.
'Registered' businesses are those businesses registered for VAT and/or PAYE. This total will differ slightly from ONS published statistics on
VAT/PAYE registered businesses (e.g. UK Business and Business Demography) - refer to the link to the User Guide for more information:
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/16418/guide_to_the_uk_business_population_and_demography.pdf.


Page 13 of 16


Numbers (in thousands)
Start of
Size
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
All private sector businesses
3,467

3,502

3,573

3,679

3,925

3,927

4,125

4,272

4,283

4,375

4,483

4,588

4,818

4,914

5,247

5,401

5,498

5,695

5,668

All SME (0-249)
3,460

3,495

3,566

3,672

3,919

3,920

4,119

4,265

4,277

4,368

4,477

4,582

4,811

4,908

5,240

5,394

5,491

5,687

5,660

All small (0-49)
3,433

3,467

3,535

3,642

3,891

3,892

4,090

4,236

4,248

4,339

4,447

4,552

4,782

4,877

5,209

5,362

5,457

5,653

5,625

All employers (1+)
1,111

1,149

1,162

1,181

1,162

1,175

1,195

1,224

1,238

1,237

1,224

1,211

1,237

1,211

1,277

1,312

1,325

1,367

1,389

Non-employers
2,356

2,354

2,411

2,498

2,763

2,752

2,931

3,047

3,046

3,138

3,259

3,377

3,581

3,704

3,970

4,089

4,173

4,328

4,278

Micro (1-9)
914

951

948

970

961

974

992

1,017

1,029

1,023

1,015

1,000

1,023

987

1,044

1,069

1,081

1,118

1,137

Small (10-49)
163

162

176

174

167

166

167

172

173

178

174

174

178

187

195

204

204

208

210

Medium (50-249)
27

28

30

30

28

28

29

29

29

29

29

31

30

31

31

33

33

34

35

Large (250+)
7

7

7

7

7

6

6

6

6

7

6

6

6

7

7

7

7

7

8

Business Population Estimates 2018



Notes for this release

1) Business Population Estimates 2018 is the latest in a series providing estimates of
the total number of private sector businesses in the UK. BPE estimates the total
number of UK private sector businesses at a point in time, including those that are
registered for VAT or PAYE and those that are unregistered (see note 13 for more
information). Related ONS publications report only on the VAT/PAYE registered
businesses.

2) To aid the interpretation of these statistics, it is highly recommended that users
refer to the Methodology and Quality Note that accompanies this release.

3) Information on the employment and turnover in these businesses is also provided.
The function of the employment and turnover data here is primarily to (i) classify
businesses by employee size band and (ii) calculate shares of employment and
turnover across industrial sectors, regions and legal statuses. This release
includes an employment time-series in Table 28 of the detailed tables. However,
users should note that these employment estimates are indicative and that ONS
publishes other sources of employment data more suitable for monitoring total jobs
and people in employment. See the Workforce Jobs series, the Business
Registers Employment Survey (BRES), and the wider Labour Market Statistics
(refer to the Methodology and Quality Note for more information).

4) A Guide explaining how this publication relates to other National Statistics on
business population and demography has been published to help users
understand the differences and choose the most appropriate source.

5) All figures in this document can also be found in the accompanying detailed tables.

6) All statistics relating to 2018 released in this publication are new. In contrast to
previous editions of this release, no data from earlier years have been revised
as re-weighted ONS Labour Force Survey data will not be available until early
2019.

Definitions

7) In this release a small business is defined as a business with 0-49 employees, a
medium-sized business is one with 50-249 employees, and a large business is
one with 250 or more employees. Small and medium-sized enterprises (SMEs) are
defined as businesses with 0-249 employees.

8) Within the scope of the Business Population Estimates, companies with a single
employee director are counted as zero employee businesses.

9) The definition of the private sector used in this publication excludes the non-profit
sector but includes public corporations and nationalised bodies.

10) Turnover data throughout this release excludes SIC2007 Section K (Financial and
insurance activities) as turnover is not available on a comparable basis.

11) Businesses that have sites (and employees) in more than one region or country
are counted here only in the region or country where they are registered. These
estimates may therefore differ from actual employment in a region, since some
people in one region will work for businesses that are registered in another region.



Page 14 of 16
Business Population Estimates 2018
Page 15 of 16




12) All figures and percentages in this document are rounded. Therefore totals may
not exactly match the sum of their parts. Suppression and controlled rounding
have been used to protect the data in this publication from disclosure. For further
information, please refer to the Methodology and Quality Note.

Overview of Methodology

13) There is no single database containing all private sector businesses in the UK.
The main source for this publication is the Inter-Departmental Business Register
(IDBR), managed by the Office for National Statistics (ONS), which is used to
provide the number of VAT/PAYE registered businesses in the UK. This
publication also includes estimates of smaller non-employing (unregistered)
businesses which are calculated using a combination of information from the ONS
Labour Force Survey and HMRC self-assessment tax return data. More detail of
the estimation process is provided in the Methodology and Quality Note.

14) This edition uses the same methodology as that used since the 2011 edition of this
publication. However, the methodology is not directly comparable to that used for
BPE 2010 or to the older SME Statistics series (1994-2009).

15) To enable robust comparison over time, a time series is calculated using the latest
methodology and data. This shows annual estimates of numbers of private sector
businesses in the UK between 2000 and 2018. Estimates for UK countries/English
regions and for different legal forms are provided for years since 2010 (the first
year for which consistent estimates can be produced).

16) Known impacts from changes to HMRC systems have been adjusted for further
details are in the methodology note.

Data users and uses

17) The Business Population Estimates are used extensively by government, the
public, public bodies and businesses to analyse the scale, structure and
significance of the total business population in the UK and to monitor change over
time. For example, they are used by:
government in understanding the likely impact of policy changes and monitoring
the impact of recessions on different sections of the business population
businesses in understanding market share and planning marketing strategies
banks in developing an understanding of their customer base

foreign firms in making UK location decisions
academics to inform research into businesses at a local and national level
a range of public bodies in decision making and in evaluating the success of
regeneration and business-related policies
public and private business support providers in targeting business support

Business Population Estimates 2018
Page 16 of 16




National Statistics publication

18) This National Statistics publication is produced to high professional standards set
out in the Code of Practice for Statistics and the Pre-Release Access to Official
Statistics Order (2008). These statistics were assessed for compliance against the
Code of Practice for Official Statistics by the UKSA during 2011-12 and in October
2012 their National Statistics designation was confirmed. They are produced free
from any political interference.

19) The United Kingdom Statistics Authority has designated these statistics as
National Statistics, in accordance with the Statistics and Registration Service Act
2007 and signifying compliance with the Code of Practice for Official Statistics.

20) Designation can be broadly interpreted to mean that the statistics:
meet identified user needs;
are well explained and readily accessible;
are produced according to sound methods, and
are managed impartially and objectively in the public interest.

21) Once statistics have been designated as National Statistics it is a statutory
requirement that the Code of Practice shall continue to be observed.
























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