The Scottish Government has today published their Businesses in Scotland: 2021 report, which estimates that between March 2020 and March 2021, the number of businesses in Scotland decreased by 5.4%, a loss of nearly 20,000 businesses.

The main purpose of the publication is to provide an estimate of Scotland’s business stock and covers the period over the first year of the COVID-19 pandemic, during which many businesses were subject to restrictions.

A summary of the key findings highlight that: 

• As of March 2021, there were an estimated 344,505 private sector businesses operating in Scotland.
• Between March 2020 and March 2021, the estimated number of businesses decreased by 5.4% (-19,805 businesses).
• The decrease over the latest year was driven by a reduction in the number of unregistered businesses (those not registered for VAT and/or PAYE).
• The number of unregistered businesses decreased from 184,850 as of March 2020 to 165,835 as of March 2021 – a decrease of 19,015 unregistered businesses   (-10.3%).
• The number of registered businesses (those registered for VAT and/or PAYE) also decreased over the latest year – down by 790 businesses (-0.4%) from 179,460 as of March 2020 to 178,670 as of March 2021.
• As of March 2021, there were 342,125 Small and Medium-sized Enterprises (SMEs) operating in Scotland, providing an estimated 1.2 million jobs.
• SMEs accounted for 99.3% of all private sector businesses, 55.1% of private-sector employment and 40.3% of private-sector turnover as of March 2021.

Commenting on the Scottish Government’s ‘Business in Scotland:2021’ report, Dr Liz Cameron, Chief Executive of the Scottish Chambers of Commerce said:

“This report lays bare the stark reality of the impact that COVID-19 restrictions have had on Scotland’s businesses during the first year of the pandemic.

“It’s clear that the unprecedented levels of restrictions placed on businesses, Government-mandated home working, and domestic and international travel restrictions have taken their toll.

“The loss of nearly 20,000 businesses, mainly small and medium-size enterprises reveals the true extent of the devastating impact that the pandemic has had on Scotland’s economy, employers and employees. Although SMEs have weathered the worst of the severe economic downturn the economy experienced over the last 18 months, it’s also concerning to see a decline in the number of large companies, those with 250 employees or more, operating in Scotland also falling in the past year.

“As Scotland’s economy now begins to recover and the vaccination rollout continues at pace into its third phase, the Scottish Government must avoid any unnecessary economic restrictions or additional burdens being placed on Scotland’s businesses. Our recovery remains fragile and a return to pre-pandemic levels of growth remains far from guaranteed.

“Scotland’s businesses drive growth, create jobs and pay the taxes that drive investment and finance our public services. The Scottish Government should take note of this report ahead of the Scottish Budget next month and put forward a budget for business growth that creates the right environment for businesses to be able to survive and grow.”

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