VAT Registrations/Deregistrations by Industry

This data set contains estimates of the number of enterprises registering and de-registering for VAT as published by the Department for Business, Enterprise and Regulatory Reform (BERR). They are the best official guide to the pattern of business start-ups and closures.

A guidance note, which gives details of the methodology and the revisions, is available from the BERR website using the link below.

methodology and accuracy of the 1994 to 2007 series (pdf)


For the convenience of online presentation, the stocks variable on Nomis is described as "stock at end of year" rather than "stock at start of year" as in the official publication. This is a purely presentational difference, and has no effect on the data. So, the new data contains registrations and deregistrations for 2006 along with stocks at the end of 2006 / start of 2007. The end/start of year refers to the calendar year (i.e. 31 Dec/1 Jan).


Background notes

  1. VAT registrations and de-registrations are the best official guide to the pattern of business start-ups and closures. They are an indicator of the level of entrepreneurship and of the health of the business population. As such they are used widely in regional and local economic planning.

  2. These figures do not, however, give the complete picture of start-up and closure activity in the economy. Some VAT exempt sectors and businesses operating below the threshold for VAT registration are not covered. At the start of 2006, the VAT threshold was an annual turnover of £60,000, and 1.9 million of the estimated 4.5 million enterprises in the UK were VAT-registered.

  3. However, some businesses do voluntarily register for VAT even though their turnover is below the threshold. Data for 2006 shows that around a fifth of all registrations have turnover below the VAT threshold.

  4. To make the figures as comparable as possible over time, a number of adjustments are made. The registration figures for recent years are increased slightly to allow for the small number of registrations that take more than a few months to be reported. Similarly, the de-registration figures are decreased slightly to take account of dormant businesses which were classed as de-registered, but that have subsequently been found to be active again.

  5. Many factors influence the pattern of business start-ups. Among the most important are economic growth (encouraging new ventures and creating demand for business and personal services), the level of industrial restructuring and contracting out, and the stock of people with management or small business experience.

  6. The source of these figures is the Inter-Departmental Business Register (IDBR). It contains records of all businesses registered for VAT. The IDBR is administered by the Office for National Statistics (ONS), which publishes information on the stock of VAT registered businesses in UK Business: Activity, Size and Location. The BERR and ONS publications complement each other, although adjustments and minor differences in coverage mean that they contain slightly different estimates of the registered business population. The BERR estimates are also subject to revision.

  7. Some VAT-registered enterprises are excluded from the series, since details of their location or date of de-registration are not known. This is to avoid misleading comparisons of data. More detail is available in the accompanying guidance note on the BERR website.

  8. The de-registrations estimates released in last year's publication (October 2006) have been revised downwards, particularly for 2003-05. This is because a number of dormant businesses, which had previously been identified as de-registered, became active again and this is reflected in the updated lag adjustment factors. The resulting decrease in de-registrations now seen in 2003-05, which continued into 2006, is consistent with source data from the IDBR. Further information can be found in the guidance note.

  9. To ensure a single methodology and source for users, next year will see the final publication of 'Business start-ups and closures: Vat registrations and de-registrations in the UK'. In future users will be directed to the ONS statistics for information on business start-up and closures. More information on the differences between the methodology and statistics will be provided by BERR alongside next year's publication.