Overall the ONS business demography series shows higher numbers of business births and deaths than the VAT registrations/de-registrations statistics. The main reason for the difference is the inclusion of PAYE registered enterprises in the business demography series which means that for the first time businesses, with employees, who are not registered for VAT will be included in the enterprise births and deaths series. The key difference therefore is that the new series contains VAT and / or PAYE registered businesses: the VAT series counted VAT registered businesses only.
An active business is defined as a business that either had turnover or employment at any time during the reference year. Births and deaths are then identified by comparing active populations for different years - those businesses that are present for the first time, or absent, when compared to the current year. Births do not include entry into the population as a result of mergers, break-ups, split-offs or other restructuring.
The business demography series includes a "preliminary death indicator" which includes an adjustment for estimated reactivations. Reactivations occur when a business becomes dormant for a period of less than 2 years then recommences in a manner which complies with a definition of continuity. A business that recommences activity in a different location is counted as a death and then followed by a birth. Reactivations can also occur due to lags in administrative processes. The deaths data excludes losses to the population as a result of mergers, break-offs, split-offs and other restructuring.
The business demography series recognises a businesses activity at any point in the year whereas the VAT registration/de-registration counted businesses at a specific point in time.
Time series data is included in the business demography data release. The new methodology has been retrospectively applied to give consistent data from 2004 - 2007. Data are rounded to the nearest 5.
