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 average number of VAT registrations per month in each region of the UK from 1995 to 2005 are shown in the table.
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 United Kingdom 13,479 13,838 15,223 15,184 14,743 14,909 14,168 14,743 15,935 15,315 14,827 North East 335 335 338 342 349 356 348 366 408 372 375 North West 1,328 1,340 1,475 1,462 1,406 1,430 1,374 1,449 1,584 1,507 1,458 Yorkshire and the Humber 920 945 991 984 978 1,000 972 1,037 1,153 1,088 1,058 East Midlands 873 889 955 960 932 968 938 998 1,070 1,032 1,001 West Midlands 1,098 1,103 l,215 1,228 1,204 l,216 l,177 1,217 l,318 1,263 1,218 East 1,323 1,343 1,528 1,462 1,404 1,469 1,388 1,485 1,561 1,485 1,483 London 2,567 2,684 2,985 3,141 3,018 3,028 2,783 2,746 2,979 2,943 2,826 South East 2,183 2,235 2,517 2,480 2,402 2,403 2,271 2,388 2,563 2,400 2,308 South West 1,119 1,195 1,325 1,306 1,278 1,282 1,205 1,296 1,385 1,291 1,243 England 11,745 12,068 13,328 13,363 12,969 13,151 12,455 12,981 14,021 13,380 12,970 Wales 490 511 526 514 510 524 502 536 595 587 536 Scotland 937 949 1,040 995 959 945 915 928 998 998 960 Northern Ireland 308 310 329 312 305 288 296 299 320 350 361 1 Estimates of the average number of VAT registrations per month have been produced by dividing the number in each year by 12. Source: SBS Business Start-ups and Closures: VAT Registrations and De-registrations 1994-2005, available from http://www.sbs.gov.uk/vat and the Library of the House.
VAT registration data do not capture all business start-up activity. Businesses are unlikely to be registered if their turnover falls below the compulsory VAT threshold, which has risen in each year since 1997. In the UK as a whole, only 1.8 million out of a total of 4.3 million enterprises (42 per cent.) were registered for VAT at the start of 2005.