The total number of private sector businesses registered in the UK fell by close to 400,000 over the course of 2020, according to official figures from the government.
Roughly 5.6 million businesses were understood to be in existence in the UK at the beginning of 2021, which is 389,600 fewer than were reported 12 months earlier.
Those figures illustrate a 6.5 per cent decline in the total number of businesses operating across the country and highlight how many enterprises were lost during 2020.
A vast majority and around 5.5 million of the UK businesses counted in early 2021 were small in scale and operating with a workforce of fewer than 50 employees.
Close to 36,000 are understood to have been medium-sized enterprises with between 50 and 250 employees, while around 7,700 were counted as being large businesses with workforces made up of more than 250 people.
According to the government’s Department for Business, Energy & Industrial Strategy (BEIS), the country’s overall business population increased by 61 per cent and 2.1 million between 2000 and 2021.
Annual population figures have only ever declined twice since precise data started being collected in 2000.
Perhaps unsurprisingly given the coronavirus pandemic, the most recent figures reflect by far the sharpest reduction in the overall business population recorded during the past two decades.
All regions of the UK are believed to have seen a reduction in the overall number of businesses they contained during 2020, with London and the West Midlands having both seen particularly sharp declines of 8 per cent over the course of the full year.
Business conditions have generally improved in recent months with the UK economy having largely opened up after periods of extended restrictions due to Covid-19 but huge numbers of businesses accumulated debts during the pandemic that they may now struggle to pay off.
Indeed, the latest data from the corporate insolvency experts of Begbies Traynor suggests that well over half a million companies in the UK were in a position of significant financial distress at the end of the second quarter of 2021.