Enterprise size

The size of an enterprise can be determined by different factors. For legal purposes, the European Union (EU) adopts a classification of enterprise size based on the numbers of employees, company turnover and the company balance sheet. For statistical purposes, either the numbers of workers employed or the level of turnover, generally determines the size of an enterprise or business.

The UK typically uses numbers of employees for statistical purposes. The EU definition, based on numbers of employees, and one often used in EU statistical releases and comparisons, defines a small enterprise as one with fewer than 50 employees (with micro-enterprises having fewer than 10 employees). A medium enterprise is defined as one with 50 or more employees, but fewer than 250, and a large enterprise as one having 250 or more employees.

In the UK, the Inter-Departmental Business Register (IDBR) provides a comprehensive list of businesses registered for Value Added Tax (VAT) or businesses operating a Pay As You Earn (PAYE) scheme. The Office for National Statistics (ONS) releases estimates annually of enterprise and local unit size in the UK Business: Activity, Size and Location publication.

In 2004, there were approximately 1.6 million VAT registered enterprises in the UK. Approximately 97 per cent of these were small enterprises (of which 87 per cent were micro-enterprises), approximately 2 per cent were medium enterprises and 1 per cent were large enterprises.

The Small Business Service, an executive agency of the Department of Trade and Industry, releases small and medium-sized enterprise (SME) statistics covering enterprises in the private sector. This includes public corporations and nationalised bodies and excludes government and non-profit organisations. Estimates use data from the IDBR, supplemented with estimates of self-employment from the Inland Revenue's Survey of Personal Income and the Labour Force Survey (LFS) to cover unregistered businesses. In 2003, there were an estimated 4 million business enterprises in the UK.