Official Statistics

Local sites and employees at ITL3 level 2023: guidance notes

Published 27 March 2025

General notes

About the product

Counting local units is a way of estimating economic activity in a geographical area. This release provides data on the specific locations of UK businesses, and employees at these sites.

A UK-based business may have physical premises at several locations. Each separate part of a business at these ‘sites’ is known as a ‘local unit’ of the enterprise.

To produce this data, HMRC has linked several data sources. The ONS Inter-departmental Business Register (IDBR) has been linked with the ONS National Statistics Postcode Lookup (NSPL). This has then been linked with the International Territorial Level (ITL) lookup. These links determine the area where a local unit is situated. The IDBR has also been linked with the UK overseas trade in goods statistics (OTS) data, which enables identification of VAT registered businesses.

An example of a business included in this data would be a national supermarket chain. It would be identified as a single enterprise on the IDBR. It would also be identifiable on the OTS data as a single VAT registration. By matching the NSPL and ITL, an indication of the location of the individual supermarket branches (local units) can be established. After linking these data sources, the number of ‘VAT-registered local sites’ was around 2.5 million. However, it is not possible to compare this number with figures published in other overseas trade statistics releases. Estimates for late or missing trade for movements of goods in and out of Northern Ireland are excluded. Also excluded are estimates for trade in oil, gas and electricity for all UK imports and exports as it is not possible to allocate this trade to individual businesses.

Each local unit listed on the IDBR is associated with an overarching enterprise. However, most enterprises (80%) are single-site businesses that do not possess local units. Currently, these enterprises do not appear on the IDBR local unit file. For the purposes of this output, each of these single-site enterprises is counted as a single local unit. The remaining minority of multi-site enterprises (20%) are broken down into their component local units. Each local unit is given a count of one. Within this publication, the term ‘local site’ is used as an umbrella term covering both single-site enterprises and local units. 

This 2023 release should only be compared with the 2022 release, and not any earlier releases. The reason for this is that both the 2022 and 2023 releases have been produced using similar methods and data sources. In contrast, the local sites publications up to and including the 2021 release have been produced using different processes. This is because there were a number of methodological changes as a result of the UK leaving the EU. This caused breaks in the time series. These are described in Our data sources.

Official statistics

HMRC has re-classified this release. This follows an ongoing assessment of data sources and methodologies. HMRC has removed the ‘in development’ status of ‘Local sites and numbers of employees linked to businesses involved in international trade in goods, by subnational areas of the UK’. These statistics are now ‘Official statistics’.

Official statistics are statistics produced by Crown bodies and other organisations listed within an Official Statistics Order. This is on behalf of the UK government or devolved administrations. They provide a factual basis for assessment and decisions on economic, social and environmental issues. This is at all levels of society.

These statistics are in line with the Government Statistical Service (GSS) Code of Practice for Statistics. These cover:

• Trustworthiness
• Quality
• Value

To do this, we use the same processes used in the production of the UK overseas trade in goods statistics (OTS). The OTS are accredited official statistics published monthly. It was assessed for compliance with the Code of Practice in 2010.

UK trade in goods by business characteristics is compiled to serve the needs of many users, including:

• governments
• business communities
• compilers of other economic statistics
• various regional and international organisations
• researchers
• the public

These statistics are also used for:

• press queries
• Parliamentary questions
• Freedom of Information requests
• other government departments who rely on HMRC’s data to inform evidence-based policies

The Office for Statistics Regulation (OSR) regulate our statistics. They set the standards in the Code of Practice. All producers of official statistics should meet these standards.

The UK overseas trade in goods statistics methodology and quality report is available for users. It shows how HMRC statistics meet the standards in the Code of Practice.

If you have any comments about how we meet these standards, you are welcome to contact us by emailing uktradeinfo@hmrc.gov.uk.

You can contact OSR by emailing regulation@statistics.gov.uk or via the OSR website.

Data sources

HMRC has linked the ONS Inter-departmental Business Register (IDBR) with the ONS National Statistics Postcode Lookup (NSPL) and ONS International Territorial Level (ITL) lookup. It has further linked this with the HMRC UK overseas trade in goods statistics (OTS) trade data. This has enabled reporting on the number of local units linked to a registered trading business. It has also enabled reporting on the number of employees at these locations. This forms the basis of the publication.

The IDBR is a list of UK businesses. These are used by the government for statistical purposes. More information can be found on the ONS page for the Inter-Departmental Business Register.

The NSPL relates UK postcodes to statistical geographies. More information can be found on the ONS page for statistical geographies. The output areas from the 2021 Census have been used for this. The NSPL therefore supports the production of area-based statistics from postcode data. It is produced by ONS Geography. ONS Geography provides geographic support to the Office for National Statistics (ONS). They also provide geographic services used by other organisations.

More information can be found on the ONS page for postcode products.

The ONS ITL lookup is a tiered grouping of UK administrative areas. These groupings are suitable for statistical use. The ITLs reflect the Eurostat Nomenclature of territorial units for statistics (NUTS) system. This was previously used by the UK for area statistics. More information can be found on the ONS page for international geographies.

The OTS shows the UK’s international trade in goods. Data breakdowns are shown by partner country and commodity. More information can be found in the Methodology paper for UK trade in goods statistics.

Methodology

Linking local sites’ postcodes to UK regions

The NSPL and ITL lookup have been used to link each local site to a postcode, and then to an ITL level 3 (ITL3). More information about the ITL can be found on the ONS page for international geographies.

An ITL3 region has been assigned to the majority of local sites by using their postcode. In some cases, a postcode cannot be used. For these instances, local sites’ ITL3 regions have been estimated where it has been possible to. This is done using fuzzy matching techniques.

Some local sites cannot be assigned to an ITL3 region. These are mainly foreign-owned businesses or businesses based in the Isle of Man or the Channel Islands. These local sites have been assigned to the ‘Unknown’ region category. For more information, see Unknown category in the Data categories section.

The number of local units for a business equates to the number of local units per ITL3 location category. The number of employees is the total for all its local units within an ITL3 combined.

The OTS-IDBR data matching process

The VAT number of each business within the OTS data is linked to an enterprise on the IDBR.

The population of all local sites has also been derived from the IDBR. All local units linked to a VAT-registered business were included. Also included were all single-site enterprises linked to a VAT-registered business.

An enterprise is regarded as ‘trading’ if it either imports goods, exports goods, or both. If this enterprise is indeed trading, it is assumed that all of its local sites are. This may not be true in all cases. For example, an enterprise may carry out exports from only particular locations. Other locations may only host administrative offices. However, it is not currently possible to tell apart the local sites that are trading from those that are not.

All employees of a trading enterprise are assumed to be involved in the activity of overseas trade in goods. Again, this may not be true in all cases. Take the example of local supermarket employees. They are employees of an internationally trading enterprise but may not be actively involved in trading themselves. It is not currently possible to tell apart the employees who are working on trading activities from those who are not.

Comparison with other HMRC publications

Comparison with the UK trade in goods by business characteristics publication

The trade data in this release have been compiled on a Special Trade basis. This means that only goods that enter or leave free circulation in the UK are included. This is in line with the trade basis used for the UK trade in goods by business characteristics (TIGBC) release. The methodology for this release links the VAT number of each business within the OTS data to an enterprise on the IDBR. This is the same method as used for the TIGBC. For more information on how the TIGBC is produced see the UK trade in goods by business characteristics 2023: guidance notes.

Although the compilation methodologies are similar, the data in this release are not comparable with those in the TIGBC publication. This is because the data presented in this release is at the level of the local site, whereas the TIGBC reports at the level of the enterprise.

Local sites’ counts can often present a different picture to that given by the enterprise counts. This is due to the ‘netting off’ effect. For example, the number of enterprises exporting to the EU could decrease year on year. In contrast, the number of local sites underpinning these enterprises could potentially increase. Local sites are not always aligned to the same enterprise year on year, due to changes in business structure and ownership. This can also affect any year-on-year comparisons.

For this reason, the data in this release is not intended for measuring trends in trading patterns for the UK as a whole. The TIGBC publication covers aggregated trade for the UK. It is therefore more appropriate for analysing changes in business counts and employee counts at the national level.

There is a different level of enterprise coverage between the two products.  This release captures around 89% of the enterprises that are included in the TIGBC. The reason for this is that this release covers only those enterprises that can be linked to the IDBR. The TIGBC also covers enterprises that cannot be linked to the IDBR.

As described in the ‘counts for trading employees’ section, enterprises listed on the IDBR as having zero employees are adjusted.  Specifically, the employee count is increased to 1, as each business is assumed to support at least one job. This adjustment is not made in the TIGBC. As such, the total employee counts for importers and exporters in this release are slightly higher than those in the TIGBC.

Comparison with Regional trade statistics (RTS) or Regional trade in goods statistics disaggregated by smaller geographical areas

The data in this release are not comparable with those in the RTS release. The reasons for this are:

The data presented in this release is at the level of the local site.  The RTS publications report on VAT-registered businesses.

There are methodological differences between the RTS and this Local sites release in the way trade data is linked to IDBR data.

Businesses exclusively trading non-monetary gold have been included in this release, whereas RTS data excludes such businesses.

This release differs from RTS in its treatment of VAT data. This results in differences in the number of businesses being captured for the Northern Ireland region.

Similar data on trade in services

The ONS produce the Subnational trade in services publication.

The methodologies for the HMRC and ONS releases were developed concurrently. However, there are differences between the two publications. These are:

Trade in goods from HMRC and trade in services from the ONS are each collected on a different basis. HMRC uses a ‘physical movement’ basis for trade in goods. ONS uses a ‘change of ownership’ basis for trade in services. Change of ownership refers to the transfer of economic ownership. The focus is on whether ownership rights, risks, and rewards of the service have been transferred between a UK and non-UK entity. A transaction is recorded when this change occurs, even if the service is not physically delivered at that moment. For example, a UK law firm providing legal advice to a German company: The service is counted as a UK export when the German company agrees to pay for the service, not when the legal work is physically completed.

This release includes data for businesses in the Channel Islands. These are included in the ‘Unknown’ category for this release. ONS data excludes these businesses.

Local site counts and employee counts can be different between HMRC and ONS publications because of these attributes.

Data measures

Counts of the total number of local sites and employees

The measures that cover all local sites for UK enterprises are:

• Total number of local sites
• Total number of employees

The number of local sites for a business is the number of different postcode locations at which the business has physical premises.

The number of employees associated with a local site is the number of people employed at that physical location.

Counts for trading local sites

These measures provide counts for all ‘trading’ local sites. A local site is identified as ‘trading’ if its parent enterprise has overseas trade in goods. Specifically, import trade, export trade, or both.

The counts are sub-categorised for local sites linked to enterprises with only EU trade, only non-EU trade, and both.

Data items for exporters are:

• Local sites linked to an exporting enterprise
• Local sites linked to enterprises that export only to the EU
• Local sites linked to enterprises that export only to non-EU countries
• Local sites linked to enterprises that export to both EU and non-EU countries
• Local sites linked to enterprises that export to the EU
• Local sites linked to enterprises that export to non-EU countries

Data items for importers are:

• Local sites linked to an importing enterprise
• Local sites linked to enterprises that import only from the EU
• Local sites linked to enterprises that import only from non-EU countries
• Local sites linked to enterprises that import from both EU and non-EU countries
• Local sites linked to enterprises that import from the EU
• Local sites linked to enterprises that import from non-EU countries

Counts for trading employees

These measures provide counts for all ‘trading’ employees. An employee is identified as ‘trading’ if the parent enterprise of their local unit has overseas trade in goods. Specifically, import trade, export trade, or both.

The counts are sub-categorised. These sub-categories are for enterprises with ‘only EU’ trade, ‘only non-EU’ trade, and ‘both’.

An adjustment is made for local sites whose parent enterprise is a foreign-owned business. This adjustment is whereby the employee count is given a value of zero.

If a local site is listed on the IDBR as having zero employees, it is assumed this business has one employee. Local sites listed on the IDBR as having zero employees are those where no business proprietors or workers are linked to the PAYE system. For the purposes of this publication, it is assumed that any such business will support at least one job. Each of these businesses is therefore given an employee count of 1.

Data items for exporters are:

• Employees linked to an exporting enterprise
• Employees linked to enterprises that export only to the EU
• Employees linked to enterprises that export only to non-EU countries
• Employees linked to enterprises that export to both EU and non-EU countries
• Employees linked to enterprises that export to the EU
• Employees linked to enterprises that export to non-EU countries

Data items for importers are:

• Employees linked to an importing enterprise
• Employees linked to enterprises that import only from the EU
• Employees linked to enterprises that import only from non-EU countries
• Employees linked to enterprises that import from both EU and non-EU countries
• Employees linked to enterprises that import from the EU
• Employees linked to enterprises that import from non-EU countries

Counts for trading local sites and employees as a proportion of totals

These measures look at the counts of trading local sites against the total number of local sites. They also look at the counts of trading employees against the total number of employees. These give the proportions of total local sites and employees that have overseas trade in goods.

Data items for exporters are:

• Local sites linked to an exporting enterprise, as percentage of total number of local sites
• Local sites linked to enterprises that export only to the EU, as percentage of total number of local sites
• Local sites linked to enterprises that export only to non-EU countries, as percentage of total number of local sites
• Local sites linked to enterprises that export to both EU and non-EU countries, as percentage of total number of local sites
• Local sites linked to enterprises that export to the EU, as percentage of total number of local sites

• Local sites linked to enterprises that export to non-EU countries, as percentage of total number of local sites

• Employees linked to an exporting enterprise, as percentage of total number of employees
• Employees linked to enterprises that export only to the EU, as percentage of total number of employees
• Employees linked to enterprises that export only to non-EU countries, as percentage of total number of employees
• Employees linked to enterprises that export to both EU and non-EU countries, as percentage of total number of employees
• Employees linked to enterprises that export to the EU, as percentage of total number of employees
• Employees linked to enterprises that export to non-EU countries, as percentage of total number of employees

Data items for importers are:

• Local sites linked to an importing enterprise, as percentage of total number of local sites
• Local sites linked to enterprises that import only from the EU, as percentage of total number of local sites
• Local sites linked to enterprises that import only from non-EU countries, as percentage of total number of local sites
• Local sites linked to enterprises that import from both EU and non-EU countries, as percentage of total number of local sites
• Local sites linked to enterprises that import from the EU, as percentage of total number of local sites

• Local sites linked to enterprises that import from non-EU countries, as percentage of total number of local sites

• Employees linked to an importing enterprise, as percentage of total number of employees
• Employees linked to enterprises that import only from the EU, as percentage of total number of employees
• Employees linked to enterprises that import only from non-EU countries, as percentage of total number of employees
• Employees linked to enterprises that import from both EU and non-EU countries, as percentage of total number of employees
• Employees linked to enterprises that import from the EU, as percentage of total number of employees
• Employees linked to enterprises that import from non-EU countries, as percentage of total number of employees

Data categories

International Territorial Levels (ITL)

The geographical classification system previously used by the UK was the Nomenclature of Territorial Units for Statistics (NUTS). The International Territorial Levels (ITL) replaced NUTS in January 2021.

The ITL for the UK is on 3 levels.

Level 1 (ITL1) has 12 categories.

9 regions in England are included as:

• London
• South East
• South West
• East
• East Midlands
• West Midlands
• Yorkshire and The Humber
• North East
• North West

3 regions are included for other areas of the UK as:

• Wales
• Northern Ireland
• Scotland

This data in this release is provided at Level 3 of the ITL (ITL3). It is comprised of 179 counties, groups of unitary authorities, council areas, and local government districts related to the ITL1 categories. More information about the ITL can be found on the ONS page for international geographies.

The new ITL classification was used for the first time in the 2020 version of this release. ITL3 regions have been designed to mirror the old Nomenclature of territorial units for statistics level 3 NUTS3 regions. However, we advise against direct comparisons of ITL3 level between publications from 2019 and prior with those from 2020 onward. This is due to the potential effect of data source changes between these periods. Users may find that certain local units are allocated to ITL3 regions differently.

The abbreviation ‘CC’ meaning ‘County Council’ is used for some ITL3 region names.

Unknown category

The majority of ‘Unknown’ ITL3 regions are related to Non-established Taxable Persons (NETPs). NETPs are foreign-owned businesses with no physical presence in the UK. This is apart from that required for tax purposes. By default, NETPs are assigned to the Aberdeen tax office postcode as a means of identifying them.

For this publication, businesses with this postcode have been manually re-assigned to the ‘Unknown’ region category. Their employee counts have been adjusted to zero. This is in line with best practice within HMRC on the basis that they have no physical presence in the UK. This aligns with the methodology used for the current Regional trade statistics (RTS). It also aligns with other sub-regional ad hoc analyses undertaken by HMRC.

The remaining ‘Unknown’ ITL3 regions relate to businesses based in the Channel Islands and Isle of Man.

Definitions

Business

For the purposes of this release, the term ‘business’ denotes an enterprise that has been linked to one or more VAT-registered businesses.

Enterprise

The primary business unit on the IDBR. In most cases this is a single VAT-registered business. Larger businesses may be comprised of several VAT registrations.

Inter-Departmental Business Register (IDBR)

The comprehensive list of UK businesses that is used by government for statistical purposes.

International Territorial Levels 3 (ITL3)

A geographical classification introduced in January 2021, dividing the UK into 179 regions.

Local site

This is an umbrella term covering any local unit or single-site enterprise.

Local unit

A statistical unit on the IDBR which denotes a geographical location for each site at which an enterprise has a presence.

Multi-site enterprise

An enterprise consisting of a number of local units, each based at a different geographical location.

Single-site enterprise

An enterprise based at a single geographical location, with no local units.