Value added tax (VAT) registrations and de-registrations are the best official guide to the pattern of business start-ups and closures. DTI data on the number of VAT registrations and de-registrations in (a) Peterborough constituency and (b) Peterborough city council area from 1997 to 2004 are shown in the following table. The table shows the number of new VAT registrations, the number of de-registrations and the ratio of de-registrations to registrations in each year are also shown.
1997 1998 1999 2000 2001 2002 2003 2004 Peterborough Constituency New registrations 285 250 260 250 250 280 290 245 De-registrations 210 240 190 210 185 245 265 220 ratio 0.74 0.96 0.73 0.84 0.74 0.88 0.91 0.90 Peterborough city council New registrations 480 440 435 405 430 485 525 440 De-registrations 325 355 300 365 330 385 435 405 ratio 0.68 0.81 0.69 0.90 0.77 0.79 0.83 0.92 Source: Business Start-ups and Closures: VAT Registrations and De-registrations 1994-2004, Small Business Service, available at http://www.sbs.gov.uk/vats
In both Peterborough constituency and Peterborough city council area the stock of VAT registered businesses has increased each year since 1997, as registrations have exceeded de-registrations throughout this period.
VAT registration and de-registration data do not capture all business activity. Businesses are unlikely to be registered if their turnover falls below the compulsory VAT threshold, which has risen in each year since 1997. Similarly, businesses that de-register will not necessarily have closed. Only 1.8 million out of 4.3 million businesses (42 per cent.) were registered for VAT at the start of 2004.