The number of UK businesses has reached an all-time high at 2.1 million, a 4% increase from 2 million in 2015 as the national start-up economy continues to grow.
The number of businesses per capita in the UK has virtually recovered to its pre-crunch level of 32.8 businesses per 1,000 population – it currently sits at 32.7 businesses per 1,000 population, according to UHY Hacker Young.
The increase in UK businesses appears to be a result of Britain’s thriving start-up economy, with an increasing number of entrepreneurs choosing to start their own businesses. Many of these new companies are founded by millennials in their twenties and thirties. Last year there were 26,420 companies with a director aged 21 or under.
As a place for doing business, the UK was ranked 6th by the World Bank out of 189 other countries, and this could also be another attributing cause for the increase in the number of companies. For example, in the UK, entrepreneurs can incorporate companies in 24 hours, and the UK has the lowest corporate tax rate in the G20.
The UK government also offers a range of grants, loans and tax reliefs for entrepreneurs. These range from innovation vouchers, which subsidise business advice for SMEs and startups, to Entrepreneur’s Relief, which reduces capital gains tax for entrepreneurs looking to sell their businesses. Just last week small business minister Margot James announced a £40 million entrepreneur fund, designed to enable the rapid growth of scale-up businesses.
Marc Waterman, partner at UHY Hacker Young, says: “The UK’s thriving start-up economy has driven the number of businesses to its highest ever level.”
“The recession showed that working for big business is no longer a guarantee of job security.”
“In this environment, the UK Government is aware that a large proportion of millennials want to start their own businesses, and has put a range of schemes in place to support new companies. This has given young people the confidence to strike out on their own.”