Small Business Matters

SME’s and the Economy:

  • Small businesses accounted for 99.3% of all private sector businesses at the start of 2015 and 99.9% were small or medium-sized (SMEs).
  • Total employment in SMEs was 15.6 million; 60% of all private sector employment in the UK.
  • The combined annual turnover of SMEs was £1.8 trillion, 47% of all private sector turnover in the UK.

Composition of the business population:

  • In 2015, there were 1.3 million employing businesses and 4.1 million non-employing businesses. Therefore, 76% of businesses did not employ anyone aside from the owner.
  • The overall business population includes three main legal forms: there were 3.3 million sole proprietorships (62% of the total), 1.6 million companies (30%), and 436,000 ordinary partnerships (8%).
  • There were 2.4 million businesses registered for VAT or PAYE, 44% of the total population. A further 3.0 million are not registered for either VAT or PAYE.

Trends in the business population:

  • There has been sustained growth in the total business population, with increases of +55% since 2000 and +3% since 2014.
  • The majority of population growth since 2000 has been due to non-employing businesses, which accounted for 90% of the 1.9m increase.
  • The growth in numbers of businesses last year reflected the composition of the business population in 2014, with non-employing businesses accounting for three quarters of the overall 146,000 increase.
  • The number of companies has increased in recent years and increased again in the last year by 117,000 (+8%). In contrast, the number of ordinary partnerships continued to fall, with a 21,000 (-5%) reduction from 2014. The number of sole proprietorships increased by 50,000 (+2%).

Locations and industries:

  • The business population in southern England is larger relative to resident population than elsewhere in the UK.
  • SMEs account for at least 99% of the businesses in every main industry sector.
  • Just under a fifth of all SMEs operate in Construction, compared to just 1% in the Mining, Quarrying and Utilities sector.


(updated November 2015)

Figures obtained from the Department for Business, Innovation & Skills.