Administrative data such as companies’ VAT records provide potential source material for producing National Accounts. Output figures are currently compiled from turnover data collected by a monthly survey of businesses, the Monthly Business Survey (MBS). This enumerates all large firms and a sample of small firms. VAT returns, made by nearly all firms with an annual turnover larger than £83,000, similarly include data on firm turnover. This project has shown how the VAT returns for small firms can be used to produce turnover figures which can be used in the calculation of GDP. We consider if the model provides consistent results as more data gradually become available, and, consequently, if the model is stable enough to be implemented in ONS production processes.
In response to the coronavirus pandemic, we also considered whether early vintages of the VAT data were good predictors of the path that could be derived from later vintages of VAT data. If they were, then the data could be used for nowcasting as well as backward-looking estimates. Using a two-stage process, we showed the early estimates were fairly stable and could be used for nowcasts, providing sufficient care was taken in the cleaning and use of the data.