Wholesale and retail recorded the largest numerical increase in active VAT traders in 2024–25. HMRC’s figures reveal changes in the registered business population, but cannot alone establish whether retail sales or competitive pressure are rising.
The number of active VAT traders in HMRC’s wholesale and retail category rose by 9,500 to 511,300 in 2024–25, a 2% increase and the largest numerical gain of any sector.
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The increase stood out against relatively modest growth across the UK VAT population, which added 11,400 traders to reach 2.33 million. Wholesale and retail therefore accounted for most of the net increase during the year.
The combined category represented 22% of active VAT traders and £57bn in net Home VAT liability, making it the largest sector by both measures.
For retailers, suppliers and investors, those figures raise questions about the composition of the trading economy. However, HMRC’s headline classification groups wholesale and retail together, so the results cannot establish how much of the change came from retailers alone.
More traders, but not necessarily more shops
HMRC’s latest annual VAT statistics, covering 2024–25 and updated in December 2025, provide a baseline for examining the registered trading population.
The increase of 9,500 in wholesale and retail does not mean that 9,500 shops opened. A VAT trader is not equivalent to a retail outlet or a newly established business.
Businesses can enter or leave the VAT system for different reasons, including changes in turnover or trading circumstances. Businesses below the compulsory registration threshold can also register voluntarily.
Nor does a larger trader population demonstrate stronger consumer demand. It cannot show whether existing retailers sold more, improved their margins or expanded their physical or online operations.
The figures are therefore most useful for identifying changes that warrant closer investigation. For suppliers, that could mean examining whether the businesses behind the increase represent potential customers. For retailers, it could mean assessing which categories or locations are attracting additional competitors.
Registrations reveal movement beneath the headline
Across all sectors, HMRC recorded 234,000 new VAT registrations and 218,000 deregistrations during 2024–25. There were 2,285,900 live traders at the financial year-end.
That year-end total differs from the annual active population of 2.33 million. HMRC’s annual measure includes traders that were live at year-end or submitted a non-nil VAT return during the year.
The distinction matters when comparing business counts. An annual measure of activity and a snapshot of live registrations describe different populations.
The registration figures also show how modest overall growth can coexist with substantial movement into and out of the VAT system. They should not, however, be interpreted as a direct count of business births and failures.
For retail decision-makers, the next question is which businesses account for that movement. The UK-wide totals do not establish whether retail entrants are winning customers, taking market share or generating higher sales.
What the £57bn figure measures
Wholesale and retail accounted for 32% of total net Home VAT liability in 2024–25. Its £57bn liability was £1bn higher than a year earlier.
Net Home VAT liability is derived from VAT returns and differs from cash receipts. The figure should therefore not be described as £57bn of tax paid by retailers. It also does not represent retail sales, profits or market size.
VAT liability reflects tax treatment and recoverable VAT as well as trading activity. Its increase cannot, by itself, establish whether consumers bought more goods or businesses became more profitable.
The figure demonstrates the combined category’s prominence within the VAT system. Assessing its commercial performance requires evidence beyond the tax totals.
Larger traders dominate declared liability
HMRC’s turnover data show that businesses with annual turnover above £10m accounted for £133bn, or 75%, of net Home VAT liability across all sectors.
This is an economy-wide finding. It does not establish that UK retail market share is becoming more concentrated.
It does illustrate why business numbers alone offer an incomplete picture. Counting traders gives each business equal weight, regardless of its turnover, customer base or purchasing power. A commercial assessment needs to consider scale as well as numbers.
For suppliers evaluating opportunities, the relevant question is how much demand potential customers represent. For retailers assessing competition, it is how competitors’ sales and market shares are changing.
Turning the figures into retail insight
The strongest commercial use of HMRC’s data is to guide more targeted analysis.
Retail sales volumes can help assess demand. Business-demography data can provide evidence on business births and deaths, while company accounts and market-share data can help establish the scale and performance of competitors and suppliers.
The VAT register also provides an incomplete view of the business landscape because businesses operating outside it are absent from the figures.
Taken together, these considerations make the annual statistics a useful baseline rather than a standalone verdict on retail’s direction. They establish growth in the combined wholesale and retail active VAT population.
Whether that growth reflects stronger retail demand, new competitive threats or changes elsewhere in the trading economy requires further evidence.
