Analysed: The number of small businesses in the UK

There were 5.5m businesses in Britain at the start of 2022, a decrease of 1.5% on the year before, official data shows.

The latest annual business population statistics by the Department for Business, Energy and Industrial Strategy show there were 82,000 fewer businesses at the start of this year compared to the beginning of 2021.

The vast majority was 5.47m small businesses with between 0 and 49 employees, representing 99.2% of all businesses.

There were 35,900 medium-sized businesses with 50 to 249 employees and 7,700 large businesses with 250 or more employees.

Micro businesses dominate

Micro businesses with no staff continue to dominate the UK with 4.1m employing no-one. This means 74% of the UK's businesses did not employ anyone apart from the owner at the start of 2022.

Over 3m of businesses were sole traders compared to around 2m limited companies and under 0.5m partnerships.

Small and medium sized businesses (SMEs) employed 16.4 million people at the start of 2021 which is 61% of all employees in the UK.

Combined turnover at SMEs was £2.1 trillion, 51% of the total.

For VAT and PAYE, 2.7m businesses were registered, 49% of the estimated total population. Another 2.8m businesses were not registered.

UK countries and regions

When it comes to where businesses are based, there is not an even split across the UK.

Number of private sector businesses by English region and UK country, start of 2022:

With almost 2m businesses, London and the South East of England had considerably more than any other UK country or region of England at the beginning of the year.

The 1m businesses in London and 844,000 in the South East account for 34% of the UK business population.

The North East had the fewest businesses amongst English regions with 155,000.

The data showed that the English regions with the biggest decreases of businesses in 2022 compared to 2021 were Yorkshire and the Humber (7%) and the East of England (4%). The largest increase was in the South West (3%).

The were 4.8m private sector businesses in England, 341,000 in Scotland, 219,000 in Wales, and 128,000 in Northern Ireland

Number of businesses in the UK private sector per 10,000 adults, UK region and country, start of 2022:

Industries

At the start of 2022, the largest number of SMEs (914,000 or 17%) were operating in construction. There was also a large number operating in the professional, scientific and technical activities sector (762,000 or 14%), and wholesale and retail trade and repair sectors (547,000 or 10%).

Wholesale and retail trade is the sector with the highest share of both SME employment and turnover. It accounted for 14% of all SME employment and 34% of SME turnover.

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