Entrepreneurs and sole traders running businesses from garden sheds contribute almost £17 billion to the UK economy, according to new research.

A study by digital bank Starling suggests that 104,000 entrepreneurs and sole traders run operations from garden outbuildings.

The new research indicates that the recent increase in self-employment has seen more people choose to work from their own gardens than office environments.

It reported that 29% of micro-business owners and sole traders said they used their shed as an office at least occasionally, while 1.85% were exclusively run from sheds.

Starling said this equated to an annual revenue of £16.64 billion.

Anne Boden, chief executive and founder of Starling Bank, said: “We have a tradition of entrepreneurialism in the UK and this, combined with the growing emphasis on a healthy work-life balance, has led to an explosion in people working from their homes.

“More people are opting for the freedom of being their own boss. That’s why we designed a business bank account that allows entrepreneurs to run their businesses’ finances from their mobile phones.”

Although the average shed worker said they spent £3,343 on construction and renovation it was estimated those running a business exclusively from their shed saved an average of £8,738 a year on rent, commuting costs, food expenses and other overheads.

Psychotherapeutic counsellor Katrina Murrell, from Northampton, runs her business from her garden shed.

She said: “In 2016, on maternity leave, with increasing anxiety about returning to work part-time and the cost of childcare, I thought there had to be a better option.

“As a qualified psychotherapeutic counsellor, all I needed for my practice was me and a room.

“With the support of family and very little money, a DIY ‘shed’ was purchased, built in my garden and furnished with second-hand furniture.

“My home-based business has allowed me to flex my working hours and achieve my parenthood dreams.”