Micro-business numbers continue to soar

Posted on Oct 19th, 2015 | News and opinion

There can’t be many people who get excited when the Government release their annual Business Population Estimates, but I’m one of them!

Why? Because this is the UK’s best annual snapshot of what is happening in the new world of work. Once again the figures show more people than ever are setting up in business. There are 146,000 more businesses than in 2014 (3% up), which means that since 2000 there are 1.9 million more firms in the UK, a 55% increase.

What is particularly striking is that the vast majority of firms are considered by the Government to have no employees. The figures show 4.1 million out of the total 5.4 million businesses are counted as having no employees. Companies of a single employee-director are included in this no employee category.

The continued year-on-year growth in the micro-business and freelancer economy is testament to the great entrepreneurial spirit of all those people starting out in business. I passionately believe technology and the new economy mean more people than ever feel confident enough to step out on their own. Apps and online services mean trying a new business idea either full time or on the side are more achievable than ever before.

However I worry that some in Government will see the continued strong growth in ‘no employee’ businesses as a sign that people are dodging tax by switching from being employees to using a Personal Service Company whilst effectively doing the same work. Such concerns have been flagged in recent Government documents.

Yet, to counter this view, the breakdown of micro-businesses across sectors in this latest statistical release do show genuine micro-business growth in professional and creative industries, which backs what we are seeing on the ground.

I’m working hard with the micro-business community to share their successes and explain to politicians the unique contribution they are making to our country. Rather than being seen as the sign of lost tax revenue, they should be see as the fuel that keeps our economy going.

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Written by Jason Kitcat

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