Illustrations – time delays and taking frames

5.6.1 The UK Business Register

The UK register holds two classifications and two measures of size. A current value shows the latest position and is used to form the frame for the annual inquiries. A “frozen” value (updated only at the start of the year, before January selections, from the current values at that time) is taken through the year to ensure consistency throughout the year for sub-annual inquiries. Thus the annual frame relates to a later period than the short-term frame, the UK concentrating on accuracy for structural statistics in preference to congruence with short-term surveys.

The register is updated from a number of sources during the year:

i. PAYE Updates. Tapes are received from the tax authority every quarter giving details of new units, closures and changes of structure.

ii. VAT Updates. A weekly tape is received from HM Customs and Excise containing details of births (new registrations), deaths (deregistrations) and amendments. Enterprises with no local units or PAYE units have an employment imputed from the VAT unit turnover using the turnover per head figure appropriate to the classification. iii. Survey Information. Size and classification data update only the current classification. iv. Visits by the Complex Business Unit (see Section 5.3.6). These are supplemented by

desk profiling within the Business Register Unit.

The births, deaths, and restructurings picked up from these sources are actioned immediately. Classification and size amendments affect only current values unless a unless a business is in

the process of being profiledor a significant error is found.

incorporated into the annual structural survey from 1998). The results of the update will drive selection for the sub-annual inquiries for the following year.

The sources of information used to update the IDBR are listed by variable below:

I. Turnover. The VAT administrative system is the main source. Survey data are used

from the distribution (“trade”) and services sectors but rarely from elsewhere. Enterprises with no VAT or survey information have a turnover value imputed from employment information.

II. Employment. The preferred source is the Annual Employment Survey (to be

incorporated into a new annual structural survey from 1998). Employment information comes from the PAYE (“Pay-as-you-earn”) tax administrative system if Annual Employment Survey data are not available. Enterprises with no employment information (either from PAYE or from AES) have employment imputed from turnover.

III. Classification information comes from a variety of sources. The following priority

applies:

A. Complex Business Unit

B. PRODCOM/Retail Inquiry/Financial inquiries C. Annual Register Inquiry

D. Short Period Turnover Inquiry E. Other business surveys F. Builder's Address file G. VAT

H. PAYE

The annual register inquiry is a new survey which will replace so-called “register proving” from 1999. The Builder’s Address File contains information on construction businesses from the Department of the Environment, Transport and the Regions’ (DETR) construction industry surveys.

Care must be taken when using two administrative sources such as PAYE and VAT to update the BR to ensure that erroneous information is not taken on and used in producing estimates. When a new PAYE unit is identified with 20 or more employees, an attempt is made to match it with a VAT unit or a local unit elsewhere on the register. If no corresponding unit is found, the unit is sent a register proving form and excluded from all estimates until its validity is confirmed. Likewise a new VAT unit would be matched with PAYE, and proving undertaken if no corresponding unit can be found. Extensive matching is carried out for units with fewer than 20 employees, but there is no proving for these units due to resource and compliance constraints. Small unmatched PAYE units in VAT exempt industries and corporate PAYE units are added to the register without proving.

The annual structural survey samples are drawn at the end of October each year. The short- term surveys are drawn dynamically each month or quarter. Samples from the short-term in- quiries are drawn from the frozen field whilst the annual inquiries select from the current fields. Samples are stratified by industry and size. The measure is usually employment. The

size groups for the annual structural sample for the production industries and for the Monthly Production Inquiry are shown below.

Annual Production Monthly Production

0-9 0-9 10-19 20-49 10-49 50-99 100-249 250+ 50-149 150+

5.6.2 The Swedish Business Register

This description refers to the middle of the 1990’s, mainly before the EU Regulations came into Swedish use (Sweden became a Member State in 1995). The Swedish BR obtains information on births and deaths from the National Tax Board every second week. The num- ber of employees is updated through several sources. The two main ones are the Tax Payroll and a special questionnaire to multiple-location enterprises, both once a year. There is also in- formation from the surveys of Statistics Sweden. For Divisions 10-37 of the Swedish SIC 1992 that is harmonised with NACE Rev.1 at the four digit level, there is an annual survey roughly at the local unit level that is an important source for the SIC code (using output information, including data on commodities).

There is a modified version of the BR, called the Statistical Register (SR), which is used as the frame for business surveys. Some units on the SR consist of a set of legal units. They are the smallest ones for which balance sheet and profit and loss data can be obtained. They are essential to the Financial Accounts Survey, and they are included in other frames for coherence. There are about 60 such large statistical units, consisting of more than 400 legal units. In the following, the term enterprise will be used to mean such units whenever they occur and legal units otherwise. (This enterprise definition is somewhat different from the EU one. An enterprise includes more legal units in some cases, and fewer in other cases; there should be further enterprises with several legal units. The number of such enterprises has, however, increased recently.)

In the sampling system, most samples are drawn in November (and some in May). The SR can then be expected to describe the situation at the end of September as to active enterprises and local units. The number of employees refers to the spring this year, t, for multiple-

location enterprises (BR questionnaires) and to December last year, year

( )

location enterprises (PAYE information). Single-location enterprises born in year t normally have 0 employees in the BR that year. Hence surveys that require a minimum of for example 10 or 20 employees do not cover births in year t.

The samples obtained are used for that year by annual surveys and for the next year by short- term surveys (some sampling is also made in May). All surveys use industry (the SIC code) for stratification. Most surveys also stratify by size, and the size measure is mostly the number of employees. The size groups in the surveys here are six, with the two top ones

totally enumerated (that is 200 employees or more). They are based on enterprises in Divisions 10-37 with at least 10 employees. They also include (roughly) local units with at least 10 employees in Divisions 10-37 belonging to enterprises in other Divisions for functional statistics, but that part of the population is disregarded here for simplicity.

number of employees: 10-19 20-49 50-99 100-199 200-499 500+

5.6.3 Some comparisons between UK and Sweden

UK and Sweden have similar routines in several respects, for example in using both PAYE and VAT as sources, and by putting extra emphasis on the BR quality around October with regard to frames. Samples for annual surveys depend on that frame, and so largely do short- period samples. Stratification by industry and size is used.

There are also differences, for example UK uses dynamic sampling for short-period inquiries and Sweden runs surveys with a cut-off limit. There are differences between units, for example the enterprise concept and the extent of applying the kind-of-activity units. UK has a special team for complex businesses, and Sweden has a special BR covering a calendar year.