ICAEW chart of the week - UK businesses

Chart: UK businesses average revenue per person

The #icaewchartoftheweek is on the 5.9m UK businesses reported by the Department for Business, Energy & Industrial Strategy (BEIS) to have been in operation at 1 January 2019, generating a total of £4.1tn in revenue each year.

According to the annual statistics published a couple of weeks ago, there are 4.5m businesses with no employees, generating an average revenue of £63k for the 4.8m person involved (this includes partnerships). This contrasts with the 1.4m businesses with employees with 22.7m people engaged at an average revenue of £170k per person. 

Unsurprisingly, the 3.2m sole traders, freelancers, partnerships and personal companies not registered for VAT or PAYE (a total of 3.5m people engaged, generating an average revenue of £34k per person) have much lower average revenues than the 1.2m that are (1.3m, generating an average of £141k). Most part-time freelancers and self-employed contractors included in the former will have no need to register for VAT, while the latter will include VAT-registered consultants and other highly-paid individuals that are self-employed or employed via their own companies.

Most of the 1.4m employers are small businesses (up to 99 staff), employing 9.9m people with an average revenue of £149k per person (not shown in the chart). These include 141,135 businesses with only 1 employee (0.3m people generating an average of £83k), 751,205 businesses with 2-4 employees (2.1m, £158k), 399,365 with 5-19 employees (3.7m, £136k) and 96,505 businesses with 20-99 employees (3.8m, £162k).

There are 12,055 medium sized businesses with 100-249 employees (1.9m people in total, generating an average of £205k), while 7,685 large businesses employed 10.9m people at an average revenue of £182k per person.

There are some important caveats. Firstly, the numbers employed may include some double counting, as people can be involved in more than one business in different capacities. In addition, it is important to note that revenue is not the same as profit, and the numbers do not analyse the cost-structure of different sizes of business.

To see the underlying data, visit https://www.gov.uk/government/statistics/business-population-estimates-2019.

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