T
he variety of VAT or PAYE-registered businesses within the UK fell this 12 months for the primary time since 2011, in keeping with official figures launched at present.
The Office for National Statistics at present revealed that there are 2.73 million tax-registered companies within the UK, as of March 2023. That is down by 1.5% from the identical time in 2022.
It is the primary decline in over a decade, with the variety of companies edging up even in the course of the pandemic.
The most vital falls have been amongst sole merchants and partnerships, suggesting small enterprise has been particularly arduous hit.
In phrases of sectors, transport and storage, IT and communication {and professional}, scientific and technical companies have been amongst these seeing the sharpest declines.
The decline within the variety of companies in London was barely sharper than the nationwide common, at 1.9%.
The ONS famous that the variety of companies used to correlate with GDP, however this relationship had gave the impression to be weaker lately, which can be partly because of the pandemic.
While the official information solely goes as much as March, insolvency statistics recommend the variety of companies might need continued to say no additional via 2023.
In the second quarter of the 12 months, the variety of insolvencies in England and Wales reached the very best stage since 2009.
At the time that information was launched, David Kelly, head of insolvency at PwC, stated: “High inflation and the increasing cost base for firms is resulting in the erosion of both liquidity and shareholder value, thus reducing confidence in the ability to hit future forecasts. Coupled with rising interest rates, it is making for a very challenging environment for business.
“Like homeowners coming off fixed mortgage rates, many businesses have yet to refinance their debt, meaning the full impact of higher interest rates may yet to be felt.”
Among the high-profile companies to go bust this 12 months are Wilko, Paperchase and Hunter Boot.
