16.0% more businesses have started up so far this year but the proportion of firms registering for VAT fell, according to latest data from a BankSearch survey.
Simon Anderson, Managing Director of BankSearch said “it is encouraging that entrepreneurs are starting new ventures even though trading conditions remain difficult. Although the number of starts remains strong, the proportion of firms registering for VAT has been falling over the past couple of years and this trend is continuing. Our figures show that in 2009 38% of all new mainstream businesses registered for VAT. So far this year VAT registrations have fallen to just over 34%”.
Stephen Pegge, Head of External Affairs, Lloyds Banking Group commented “the HMRC VAT registrations are based on records which are very prone to small changes in the administration rules and can bear little relevance to underlying business demographics. However, it does appear that redundancy and a tighter labour market is prompting a move towards more part time self employment while growth beyond the VAT threshold has been held back by economic conditions”.