The number of VAT registered businesses in the UK has hit an all-time high of 2.1 million, up 4% from two million last year.
These are the findings of research by accountancy network UHY Hacker Young. It also reveals that the number of businesses per capita in the UK has reached 32.7 businesses per 1,000 population, close to the pre-crunch level of 32.8 businesses per 1,000 population.
The rise in the number of businesses is being fuelled by the UK's "thriving start-up economy" says UHY Hacker Young. Many of these new companies are founded by entrepreneurial millennials in their twenties and thirties. Last year, there were 26,420 companies with a director aged 21 or under.
Another key reason for the increase is the "ease of doing business"; the UK is ranked 6th out of 189 countries by the World Bank on this measure and has the lowest corporation tax in the G20 group of countries.
UHY Hacker Young's analysis also highlights the fact that the UK Government offers a range of grants, loans and tax reliefs for entrepreneurs, such as innovation vouchers and Entrepreneur's Relief.
Marc Waterman, partner at UHY Hacker Young, said: "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.
"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," he added. "This has given young people the confidence to strike out on their own. In the past, many would-be entrepreneurs might have thought that starting their own business was too risky, opting for the security of a full-time job. This is no longer the case."
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