Quality assuring the UK business register

1. Quality assuring the UK business register Andrew Allen

2. Quality framework • Relevance • Coherence • Timeliness/ punctuality • Accuracy • Comparability • Accessibility & Clarity

3. Aspects of UK register quality • Relevance – Business register coverage • Coherence - Administrative data input/ Profiling • Timeliness/ punctuality - Updating frequency • Accuracy – Register maintenance survey • Comparability – Quality control • Accessibility & Clarity - NSBRG/ Web site

4. Coverage • Vital that register coverage is very high • UK register based primarily on sales tax (VAT) and employers tax (PAYE) – relatively high thresholds • Explored other sources to assess coverage • Are other sources worth developing?

5. Other sources –Corporation Tax • Legal Barriers • Aggregate comparisons annually – give assurance of coverage • Identified small company gap • Would be beneficial – identifying small trading companies below VAT and PAYE threshold • Possible access through new legislation

6. Sources – business directories • Commercial databases – e.g. Yell • Thought to reach small businesses below threshold • Mostly consumer facing businesses - bias • Good for phone numbers • Expensive and commercial sensitivities

7. Sources – Valuation Office • For rateable value of businesses -site based • Potential source of local units • Occupier names missing/ empty properties • Can indicate missing local units • Worth revisiting

8. Sources – Company registrations • Used as a third source already • Some registrations not on the register • Examined a sample of the missing and their accounts to see why • Many are not trading or for leaseholders. • Challenge is to identify those trading

9. Coverage summary • Current coverage meets existing needs • None of the new sources would provide complete coverage • Pursuing Corporation Tax in conjunction with further use of Companies registrations offers most cost-effective way to improve coverage

10. Universe coherence • Different data sources lead to conflicts • Administrative data held outside survey scope until quality assured – avoids duplication and sectoral bias Examples: • Discrepancies between sources e.g. high PAYE employment – low VAT turnover • Company registration – but no tax registration • Integration of farms register

11. Timeliness • Lags in administrative processes impact on quality • Example: UK VAT data daily, but 6 - 9 months lag in VAT process • Administrative death process • Monitor changes in lags over time

12. Quality assuring input data • 2.1 million active enterprises • Team of 10 check administrative data inputs • 21 daily VAT reports plus less frequent checks • 40 checks applied to PAYE data quarterly • Examples – large growth, large births, death check against other sources, size across sources

13. Impact of new tools on quality • New tools can lead to discontinuities • Improved matching software IDS • Better match rates–meant units previously held outside universe as suspicious moved into scope of survey • Introduced in controlled way in agreement with survey users

14. Register maintenance surveys • Principally for keeping local unit structures up to date • Around 75,000 businesses per year sampled • Complex businesses sampled each year • Simple businesses less frequently • Sample of businesses with PAYE and register employment failing a closeness rule

15. Redeveloping the register survey • Merged with an annual employment survey • Will yield saving and improve coherence • Business register and employment survey

16. New sample design • Complex* 20+ FTE 1in1 • * active in more than one region and industry • Simple 100+ FTE 1in1 • Unusual cases (employment) 1in1 • Simple 20 - 99 stratified by NACE 1 in 2 • Simple < 20 FTE stratified by NACE 1 in 500 • Administrative data used for most enterprises <20 FTE

17. Profiling • Team of 8 • Profile 500 large complex businesses each year • To improve coherence between ONS surveys • To reflect current operating and legal structures • To improve response to ONS surveys.

18. Monthly quality control • Alerts users to change over time • Change to top level universe • Change to employment, turnover and number of businesses • Drills down into industry, region, legal status, administrative sources • % change by size, used to assess impact – traffic light system

19. Annual quality reports • Small change each month – can show trends • Timed to check quality before main annual survey samples taken • Also used to quality assure the business register survey – 0.5 million LU’s updated each.

20. Special industry checks • Monitoring of industries with known special criteria e.g. large employment required, only a small number in the country, discrepancies between employment/turnover Examples: • Glass and steel manufacturing • Holding companies • Investment companies

21. Accessibility • Feedback on register quality • Web publications • National Statistics Business Register Committee – key government users across UK • Annual survey of users

22. Summary - UK register quality • Part of continuous improvement • Paying attention to administrative data • Extending business register outputs • More efficient surveys • Communicating with customers