Business demography

Summary

VAT/PAYE registered businesses in 2016

In 2016, there were over 2.8 million active VAT and/or PAYE registered enterprises in the United Kingdom, of which 276,520 (9.8%) were in the North West. The Lancashire-14 area accounted for 19.5% of the regional total with 54,045 active enterprises. The Lancashire-12 area had 44,775 active VAT and/or PAYE registered enterprises.

Preston had the largest number of active VAT/PAYE registered enterprises (5,565) in the Lancashire-14 area in 2016; Hyndburn (2,455) had the lowest.

There were 61 active businesses registered for VAT/PAYE per 1,000 persons aged 18 to 74 in the UK in 2016 and 54.2 businesses in the North West. The Lancashire-12 area (53.2) and the Lancashire-14 area (51.9) had lower ratios.

Ribble Valley (74.6) had by far the greatest number of businesses per 1,000 population aged 18 to 74 in the Lancashire-14 area in 2016, followed by Fylde (63.1), whilst Lancaster (44.4), Hyndburn (44.1) and Blackpool (42.8) had the lowest.

VAT/PAYE business births in 2016

The birth rate of enterprises in the Lancashire-14 area at 12.2% (6,620 enterprise births) in 2016 was lower than the UK (14.6%) and the North West region (15.2%). For the Lancashire-12 area, the business birth rate was 11.9% (5,310 enterprise births).

Within the Lancashire-14 area, Blackburn with Darwen (14.1%) and Blackpool (14.1%) had the highest business birth rates in 2016. However both of these were lower than the UK average (14.6%). Ribble Valley (10.8%) had the lowest rate in the area.

All of the authorities in the Lancashire-14 area recorded more active enterprise births than deaths in 2016 with Preston (720) and Blackburn with Darwen (715) recording the largest number of business births in the area.

The business birth rates per 1,000 population aged 18 to 74 for the Lancashire-14 area (6.4) and the Lancashire-12 area (6.3) in 2016 were lower than the UK rate of 8.9 and 8.8 in the North West.

Within the Lancashire-14 area, none of the business birth rates per 1,000 population aged 18 to 74 were greater than the UK average (8.9). Ribble Valley (8.0), Fylde (7.7), Preston (7.2) and Blackburn with Darwen (7.1) had the highest rates. The lowest rates were recorded for Burnley (5.6), Hyndburn (5.3) and Lancaster (5.1).

VAT/PAYE registered business deaths in 2016

The business death rates of 11.0% for Lancashire-14 area and 10.8% for the Lancashire-12 area in 2016 were lower than the UK average (11.6%) and the North West rate (11.7%).

Within the Lancashire-14 area, the business death rates in 2016 were greater than the UK average (11.6%) in Blackpool (12.6%), Preston (12.2%) and Blackburn with Darwen (11.8%). The lowest business death rates in the Lancashire-14 area were recorded in Rossendale (9.9%), Lancaster (9.8%), Ribble Valley (9.8%) and Wyre (9.6%).

The business death rate per 1,000 population aged 18 to 74 in the UK was 7.1 in 2016 and 6.3 in the North West of England. The rates for both the Lancashire-14 and Lancashire-12 areas, of 5.7, were lower.

Within the Lancashire-14 area, Ribble Valley (7.3) and Fylde (7.2) had business death rates per 1,000 population aged 18 to 74 that were greater than the UK average (7.1) in 2016. Hyndburn (4.9), Pendle (4.9), Burnley (4.8) and Lancaster (4.4) had the lowest business death rates per 1,000 population aged 18 to 74 in the Lancashire-14 area.

Change in VAT/PAYE registered businesses from 2010 to 2016

The percentage increases in the number of VAT/PAYE registered enterprises in the Lancashire-14 area of 6.0% (3,065 businesses) and the Lancashire-12 area of 6.2% (2,595 businesses) were much lower than those in the UK of 20.5% (482,540 businesses) and the North West of 18.3% (42,785 businesses) since 2010. The local percentage increases were only a third, or lower than the national and regional increases.

Thirteen of the Lancashire-14 authority areas recorded increases in the number of active VAT/PAYE registered businesses between 2010 and 2016. Blackpool (-2.3%, -100 enterprises) was the only local authority in the area that saw the number of businesses fall over the period. 

None of the 13 areas in the Lancashire-14 area recorded percentage rises that were above the UK increase (20.5%). Blackburn with Darwen (12.7% +570 businesses), Chorley (11.9% +150 businesses), Burnley (11.6%, +290 businesses), Preston (9.5%, +485 businesses) and West Lancashire (8.2%, +340 businesses) recorded the largest percentage increases. 

Yearly change in VAT/PAYE registered businesses, 2015 to 2016

Between 2015 and 2016, the number of VAT/PAYE registered enterprises in the UK increased by 6.1% (169,940 businesses) and rose by 6.5% (16,780 businesses) in the North West. The percentage increases were lower in the Lancashire-12 area (3.3%, 1,415 businesses) and the Lancashire-14 area (3.2%, 1,695 businesses) over the year.

All of the authorities within the Lancashire-14 area recorded increases in the number of VAT/PAYE registered businesses between 2014 and 2015. West Lancashire (4.8%, 200 enterprises) was the only Lancashire-14 authority that saw the number rise by a greater percentage than the UK (4.7%), although Chorley (4.7%, 200 businesses) recorded the same percentage increase as the UK. Lancaster (0.8%, 35 businesses) recorded the lowest percentage rise, whilst Rossendale (25 businesses, 1.0%) saw the smallest numeric increase in the number of businesses over the year.

All of the authorities within the Lancashire-14 area recorded increases in the number of VAT/PAYE registered businesses between 2015 and 2016, however none were greater than the UK percentage rise (6.1%). Preston (5.2%, 275 businesses), Blackburn with Darwen (4.5%, 220 businesses) and Pendle (4.1%, 115 businesses) saw the greatest yearly percentage increases. Lancaster (155 businesses, 3.6%), Chorley (150 businesses, 3.3%) and Fylde (125 businesses, 3.8%) saw larger increases in the actual number of businesses than Pendle, but their percentage increases were lower. 

Hyndburn (+70 businesses, +2.9%), Wyre (+70 businesses, +1.8%), Ribble Valley (+60 businesses, +2.0%) and Blackpool (+60 businesses, +1.4%) recorded the lowest increases in active enterprises between 2015 and 2016 in the Lancashire-14 area.

VAT/PAYE registered business survival rates for those enterprises born in 2011

After only five years, more than half of the active enterprises born in 2011 had ceased to exist in the majority of areas in the UK. At the United Kingdom level, only 44.1% of enterprises born in 2011 were still active after five years. The rates were slightly lower in the Lancashire-12 area (42.1%) and the Lancashire-14 area (41.5%).

In the Lancashire-14 area, Fylde had a particularly poor five-year survival rate of just 34.3%. Blackpool (37.6%), Blackburn with Darwen (39.4%) and Hyndburn (39.6%) also recorded five-year survival rates below 40.0%. In contrast, the rates for Ribble Valley (48.1%) and Pendle (48.1%) were in excess of the UK average (44.1%). The five-year survival rate for Rossendale (44.2%) was also marginally above the UK figure.

Coastal resorts such as Blackpool, and those within Fylde district can have a tendency to attract enterprises that follow the patterns of seasonal trade, which leads to high rates of business creation but low survival rates. High business churn rates can also be a sign of greater levels of entrepreneurship within an area.

Within the North West, the Cumbria sub-region (50.5%) had the highest five-year business survival rate (for those enterprises born in 2011). This was some way ahead of the UK average (44.1%). The five-year survival rate for enterprises in the Cheshire sub-region (46.0%) was also above the UK figure. The five-year business survival rates for the Lancashire-14 area (41.5%), Merseyside (41.4%) and Greater Manchester (41.1%) were fairly similar and below the UK percentage (44.1%).

Churn rates for VAT/PAYE active registered enterprises in 2016

The business churn rate (a measure of enterprise start up and closure) in the UK was 26.2% in 2016 (North West = 26.9%). The business churn rates for the Lancashire-14 area (23.2%) and the Lancashire-12 area (22.6%) were both lower than the UK and North West figures.

Further analysis (including North West sub-regions) Business demography for VAT and pay as you earn (PAYE) active registered businesses, 2016 (PDF 1,373 KB)

Page updated 28 June 2018