Number Of Businesses in the UK

Report Highlights:

In the UK at the beginning of 2022, there were a total of 5.5 million private sector businesses.
The private sector business population has experienced a decline of 1.5% or 82,000 businesses in comparison to the year 2021.

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Number of businesses, Employment, and Turnover

The following data presents the estimated number of businesses, employment, and turnover in the UK private sector at the start of 2022, categorized by the size of the business.

All businesses in the UK private sector employed approximately 5.5 million people and generated a turnover of £4.16 trillion.
Small and medium-sized enterprises (SMEs) in the UK private sector employed over 5.5 million people and generated a turnover of £2.12 trillion.
Small businesses with 0-49 employees in the UK private sector employed over 5.4 million people and generated a turnover of £1.42 trillion.
Businesses with no employees in the UK private sector employed over 4 million people and generated a turnover of £278 million.
All employers in the UK private sector employed over 1.4 million people and generated a turnover of £3.88 trillion.
Employers with 1 to 9 employees in the UK private sector employed over 1.1 million people and generated a turnover of £530 billion.
Businesses with 10 to 49 employees in the UK private sector employed over 200,000 people and had a turnover of £609 billion.
50 to 249 employee businesses in the UK private sector employed over 35,000 people and generated a turnover of £708 billion.
Employers with 250 or more employees in the UK private sector employed over 7,000 people and generated a turnover of £2.03 trillion.

The contribution of large businesses in the UK to employment and turnover is significant, but SMEs continue to dominate the private sector, accounting for three-fifths of the employment and around half of the turnover; at the beginning of 2022:

Total employment in SMEs was 16.4 million, which accounts for 61% of the total employment, and the estimated turnover was £2.1 trillion, representing 51% of the total turnover.
Employment in small businesses was 12.9 million (48%) with a turnover of £1.4 trillion (34%).
Employment in medium-sized businesses was 3.5 million (13%) with a turnover of £0.7 trillion (17%).
Employment in large businesses was 10.6 million (39%) with a turnover of £2.0 trillion (49%).

UK Private Sector

In the UK private sector, there are three main legal forms of businesses: sole proprietorships, ordinary partnerships, and companies, with sole proprietorships being the most common form. At the beginning of 2022:

The private sector business population consisted of 3.1 million sole proprietorships, representing 56% of the total, 2.1 million actively trading companies (37%), and 353,000 ordinary partnerships (6%).
1.1 million companies, 220,000 sole proprietorships, and 95,000 ordinary partnerships were employers.
2.9 million sole proprietorships, 932,000 companies, and 257,000 ordinary partnerships did not employ anyone aside from the owner(s).

Just over 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 2022:

The Office for National Statistics recorded 2.7 million private sector businesses as registered for VAT or PAYE, which is 49% of the estimated total population.
2.8 million businesses (51%) traded without being registered for VAT or PAYE and are classified here as ‘unregistered’.
14% of sole proprietorships and 52% of ordinary partnerships were registered for VAT or PAYE.

Business Population Trends

Regarding trends in the business population between 2000 and 2022:

The business population increased by 2.0 million (59%).
The highest rate of increase was 6.8% between 2013 and 2014, followed by 6.7% between 2003 and 2004.
In contrast, the decrease of 1.5% between 2021 and 2022 is only the third decrease in the series, all of which have occurred since 2017. The largest decrease was 6.5% between 2020 and 2021.
Between 2021 and 2022, the total business population decreased by 82,000 (1.5%), with 32,000 more (2.3%) employing businesses and 114,000 fewer (2.7%) non-employing businesses.
The decrease in non-employing businesses resulted from a decrease of 98,000 (3.3%) unregistered businesses, and a decrease in non-employing registered businesses of 16,000 (1.3%).

Non-employing and employing businesses in the UK (Private Sector)

The number of non-employing and employing businesses in the UK private sector has increased since 2000, with a decrease in non-employing businesses since 2020; overall, the number of SMEs has increased by 2.0 million (59%) since 2000, including 336,000 SME employers (30%).

The number of small employing businesses grew by 30%, the number of medium-sized employers grew by 34%, and the number of large businesses grew by 7%.
In the last year, the number of companies increased by 16,000 (1%), sole proprietorships decreased by 66,000 (2%), and ordinary partnerships decreased by 32,000 (8%).
Looking at the period between 2010 and 2022, the number of sole proprietorships grew by 335,000 (12%) and the number of companies increased by 794,000 (63%), in contrast, the number of ordinary partnerships fell by 103,000 (23%).

Employment Trends

Total employment across all private sector businesses increased from 27.0 million at the start of 2021 to 27.1 million at the start of 2022, an increase of 0.3%.
The SME share of total employment was 61% in 2022.
Total employment in SMEs increased from 16.3 million at the start of 2021 to 16.4 million at the start of 2022, an increase of 0.6%.

UK Business Regions

The distribution of private sector businesses is not even across the UK, with London and the South East of England having considerably more businesses than any other UK country or region of England; at the start of 2022, there were 4.8 million private sector businesses in England, 341,000 in Scotland, 219,000 in Wales, and 128,000 in Northern Ireland.

London (1.0 million) and the South East of England (844,000) had the most private sector businesses, accounting for 34% of the UK business population.
The North East had the fewest private sector businesses among the English regions (155,000).
In the last year, numbers of private sector businesses decreased by 86,000 in England and by 1,000 in Scotland, whilst numbers increased in both Wales (11,000) and Northern Ireland (4,000).
Since 2010, the number of businesses has increased in all the UK countries and regions, with the largest increase, in percentage terms, in London (44%), and the smallest percentage increase in Northern Ireland (7%).
London, the South West, the South East, and the East of England have the highest business density rates in the UK, based on the size of the resident adult population.
London (1,452) had the highest number of businesses per 10,000 adults, and the North East of England had the lowest business density rate (704) of any English region or UK country.

Women and UK Businesses

As of February 2022, 39.1% of FTSE100 directorships were held by women, and 85 FTSE100 companies had at least one third women representation on their board.
In the same period, 36.8% of FTSE250 directorships and 37.6% of FTSE350 directorships were held by women.
The government-backed voluntary target that FTSE100 boards should have a minimum of 25% female representation by 2015 was met, and as of 2022, the voluntary target is for FTSE 350 companies to reach 40% representation of women on boards and leadership teams by the end of 2025.
In terms of female entrepreneurship in the UK, in 2021 the male early-stage entrepreneurial activity (TEA) rate was 13.2%, and the female rate was 9.7%, with a female to male entrepreneur ratio of around 3 to 4 (73%).
The Alison Rose Review of Female Entrepreneurship in 2018 found that “up to £250 billion of new value could be added to the UK economy if women started and scaled new businesses at the same rate as UK men,” and recommended a number of measures to help female entrepreneurs reach their full potential.

Ethnic Groups in UK Businesses

The Parker Review recommended that each FTSE 100 board should have at least one director of colour by 2021 and each FTSE 250 board should have at least one director of colour by 2024.
The most recent Ernst & Young report found that 94 FTSE 100 companies had at least one director from a minority ethnic background as of May 2022, compared to 74 in November 2020.
11 FTSE 100 companies had no minority ethnic directors on their boards as of December 2021.
128 FTSE 250 companies had minority ethnic representation on their boards as of December 2021.
Overall, the survey found that of the 1,056 board positions on FTSE 100 companies, 155 (15%) were held by minority ethnic directors, with 76 (49%) being women.
All FTSE 100 companies responded to the survey, compared to 95 in November 2020.

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