Title | Business start-ups: VAT registrations per 10,000 adult population. |
National Indicator/Target | Increase the business start-up rate. |
Brief Description | This measure gives an indication of new firm formation and entrepreneurship, and provides a sign of how conducive the business environment is for encouraging new ventures and increased demand for businesses. A VAT registration rate (expressed in terms of population) is the chosen measure in order to allow comparisons with other UK nations and regions, and to take account of population changes when measuring progress. |
Strategic Objective(s) to Which Indicator Relates | This indicator will inform progress in relation to the Wealthier and Fairer Strategic Objective. As outlined above, this indicator provides a sign of how conducive the business environment is for encouraging new ventures and increased demand for businesses. |
More Detailed Definitions |
Definitions of Keywords | New VAT registrations are defined as Scottish based businesses that have registered for VAT with HMRC during the year of analysis. The number of VAT registrations for Scottish based businesses is recorded within the Office for National Statistics ( ONS) Inter-Departmental Business Register. Per 10,000 adult population is defined as per 10,000 people aged 16 or over in Scotland. Rates are based on the mid-year population of resident adults in Scotland as published by the General Register Office for Scotland. |
Evidence Source | VAT registration figures for Scotland are published annually by the Department for Business, Enterprise and Regulatory Reform ( BERR). Actual figures along with VAT registrations per 10,000 adult population are provided. The above figures are the best official source for business start-ups. The figures do, however, exclude the smallest firms that operate below the VAT threshold. It is estimated that this group of firms account for 44% of private businesses operating within Scotland but that they account for only around 1% of economic activity. From 2008 onwards, the Office for National Statistics will provide UK information on business births, and the Department for Business, Enterprise and Regulatory Reform will no longer publish its VAT registration figures. If necessary, the definition and baseline data for this indicator will be revised at this point to reflect any change in methodology introduced with the shift to the ONS based data source. |
Baseline and Past Trends | The baseline figure used for this target will be the number of VAT registrations per 10,000 adult population in 2007. The 2007 data for Scotland are expected to be published by the Department for Business, Enterprise and Regulatory Reform in November 2008. The latest data available are for 2006 and show Scotland's rate as 28 registrations per 10,000 resident adults. The rate has remained relatively stable over the last decade and has ranged from 27 to 31 per 10,000 during this period. The latest 10 year trend for Scotland and the UK is shown below: Chart: VAT Registrations per 10,000 adult population 
Source: Department of Business, Enterprise & Regulatory Reform |
Methodology | This indicator is based on a straightforward rate of VAT registrations per 10,000 adult population. The exact calculation is: (X / Y ) *10,000 where
X = the number of VAT registrations
Y = the resident population The actual rate for Scotland is published by the Department for Business, Enterprise and Regulatory Reform. |
Data Ownership and Quality Assurance | VAT registration figures for Scotland are released annually by the Department for Business, Enterprise and Regulatory Reform. The data are released as part of a National Statistics publication. |
Publication of Data | VAT registration rates for Scotland are released annually by the BERR through its Business Start-ups and Closures: VAT Registrations and De-registrations publication: http://stats.berr.gov.uk/ed/vat/index.htm The figures are released annually with the 2007 data expected in November 2008. Data for previous years may be subject to revision in each release, but revisions rarely affect the Scottish VAT registration rate. From 2008 onwards, the Office for National Statistics will provide UK information on business births, and the Department for Business, Enterprise and Regulatory Reform will no longer publish its Business Start-ups and Closures: VAT Registrations and De-registrations' publication. This change is in line with the new Structural Business Statistics Regulation that will shortly be introduced by Eurostat, which will require the ONS to produce such statistics. From this point, business birth data will be produced using definitions and methodology determined by Eurostat, which will ensure greater comparability across the EU. If necessary, the indicator definition and baseline will be revised at this point to reflect any change in methodology introduced with the shift to the ONS based data. |