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Business: Suffolk

Volume 459: debated on Tuesday 1 May 2007

To ask the Secretary of State for Trade and Industry how many firms ceased trading in (a) Bury St Edmunds constituency and (b) the Suffolk county council area in each year since 1997. (134688)

Value added tax (VAT) de-registrations are the best official guide to the pattern of business closures although only 42 per cent of UK businesses were registered for VAT at the start of 2005. DTI data on the number of VAT de-registrations in (a) Bury St. Edmunds constituency and (b) Suffolk county council area from 1997 to 2005 are shown in the following table. Data for de-registrations in 2006 will be available in autumn 2007. For comparison, the number of new VAT registrations and the start of year stock of VAT registered businesses are also shown.

VAT de-registrations, registrations and stock

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

Bury St. Edmunds constituency

de-registrations

230

205

240

250

245

230

275

260

265

registrations

295

270

270

325

260

325

320

345

320

stock

3,185

3,250

3,320

3,345

3,420

3,440

3,535

3,580

3,665

3,720

Suffolk county council

de-registrations

1,605

1,620

1,625

1,675

1,730

1,785

1,835

1,775

1,695

registrations

2,035

1,890

1,855

2,060

1,885

2,100

2,160

2,085

1,915

stock

20,835

21,265

21,535

21,765

22,145

22,300

22,610

22,935

23,240

23,460

Source:

Business Start-ups and Closures: VAT Registrations and De-registrations 1994-2005, Small Business Service, available at http://www.dtistats.net/smes/vat/index.htm

In both Bury St. Edmunds constituency and Suffolk county 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 were registered for VAT at the start of 2005.

To ask the Secretary of State for Trade and Industry how many small businesses that began trading since 1997 have subsequently ceased trading in (a) Bury St Edmunds constituency, (b) Suffolk, (c) the east of England and (d) England. (134689)

While value added tax (VAT) registrations and de-registrations are the best official guide to the pattern of business starts and closures only 42 per cent of UK businesses were registered for VAT at the start of 2005. Latest VAT data on the total number of registrations since 1997 and the number of these registrations that subsequently de-registered, covering up to 2005, are shown in the following table for (a) Bury St. Edmunds constituency, (b) Suffolk County, (c) the East of England and (d) England. Data for 2006 will be available in winter 2008-09.

VAT registrations and subsequent de-registrations, 1997 to 20051

Number

Bury St. Edmunds constituency

New registrations 1997 to 2005

2,740

Number de-registering by end of 2005

855

Percentage still registered, end of 2005

69

Suffolk county

New registrations 1997 to 2005

17,980

Number de-registering by end of 2005

6,125

Percentage still registered, end of 2005

66

East of England Government Office Region

New registrations 1997 to 2005

159,155

Number de-registering by end of 2005

56,815

Percentage still registered, end of 2005

64

England

New registrations 1997 to 2005

1,423,420

Number de-registering by end of 2005

537,625

Percentage still registered, end of 2005

62

1 VAT registration and de-registration data are not available by size of business. However, 98 per cent. of the total stock of VAT registered businesses are small (0-49 employees).

Sources:

Office for National Statistics, UK Business: Activity, Size and Location -2006, available from http://www.statistics.gov.uk/StatBase/Product.asp?vlnk=933

New analysis of VAT survival rates data 1994-2004, Small Business Service, available at http://www.dtistats.net/smes/; SBS analysis of ONS Inter Departmental Business Register data.

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 may not have closed. Only 1.8 million out of the 4.3 million businesses in the UK were registered for VAT at the start of 2005.