One in 11 people of working age in the UK is running or starting a business, with the number of active firms in the UK hitting a record high of over 3 million in December last year, up 3.7 per cent from June.

New research has found that around 8.6 per cent of 18 to 64-year-olds are involved in start-ups, compared with 7.3 per cent in 2013, indicating that for many people, running their own business is now an aspirational career choice.

The biennial Entrepreneurial Index also found that there was a rise in founders cashing in or selling some or all of their company and the number of deals resulting in wealth creation of at least £200,000 rose from 1,476 in 2013 to 1,562 in 2014, an increase of 6 per cent.

Nationally, there was a big increase in the telecoms, food, property and pharma sectors, while, perhaps surprisingly, the tech sector saw a 23 per cent decrease. However, there was a geographical and gender divide.

Regions in the south showed an 8.5 per cent increase in business deals in 2014, while there was a slight decline in the north. However, the gap between the sexes was even more marked, with men being twice as likely as women to be entrepreneurially active.

Moreover, although the number of new businesses is growing, they might not be performing as well as expected. According to the research, high-growth companies with revenues of between £2.5m and £100m a year accounted for 21 per cent of businesses, down from 23 per cent a year previously.

Meanwhile, only 39.5 per cent of businesses are VAT registered, down from 41.3 per cent in 2010. This suggests that many start-ups are struggling to get their sales above the £81,000 threshold at which VAT becomes payable.

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