Title | Business start-ups: VAT registrations per 10,000 adult population. |
Associated Targets | 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 VATregistrations 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. Scottish Government analysts will work with ONS to manage the transition to the new data source, and any subsequent change to the definition, for this indicator. |
Baseline and Past Trends | The baseline figure used for this target will be the number of VAT registrations per 10,000 adult population in 2006. The latest figures for this indicator can be found on the Scotland Performs website: http://www.scotland.gov.uk/About/scotPerforms/indicators/startUp The registration figures for 2007 have increased substantially since 2006 and are the highest since the series began in 1994. It is likely that these figures partly reflect the impact of changes in tax rules in April 2007 surrounding Managed Service Companies (MSC). Businesses registered as Managed Service Companies at one address were previously excluded from this series; however following the change to the tax rules a number of these businesses have de-registered and re-registered as single entities elsewhere and this activity has been included in the series. For more information please see paragraph 10 at the following link: http://stats.berr.gov.uk/ed/vat/VATStatsPressReleaseNov2008.pdf |
Methodology for Data Source | 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 and data for previous years may be subject to revision in each release. Revisions rarely affect the Scottish VAT registration rate. See Future issues section below for information on future publications. |
Methodology for Recent Change Arrow on Scotland | Position is improving if the rate per 10,000 population increases by 1 or more compared with the previous year; and worsening if the rate per 10,000 population decreases by 1 or more. Movement within +/- 1 suggests the position is maintaining. |
Future issues or reviews | 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 introduced by Eurostat, which requires 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. Scottish Government analysts will work with ONS to manage the transition to the new data source, and any subsequent change to the definition, for this indicator. |