Britain has recorded its highest number of company closures in two decades, with the last quarter of 2024 seeing 198,046 companies removed from the official register.
This figure, revealed by research firm Bowhurst, exceeds levels last reached in 2021 and in the wake of the 2008 financial crisis.
Henry Worwood, managing director of research and consultancy at Bowhurst, said the increase in corporate dissolutions is largely a result of last year’s budget measures, coupled with a difficult funding climate. “We really need to make sure the situation doesn’t get worse,” he added.
Separately, data from Zimbler Bank, a small business lender, suggests an 8 percent decline in new business formations throughout 2024, bringing the total to 807,000. Rich Wagner, CEO of Zimbler, noted that high costs and strict oversight of new businesses can deter many would-be entrepreneurs. Last year, Companies House was given new powers and raised the incorporation fee from £12 to £50, which coincided with an almost 20 per cent annual drop in registrations between May and December.
Wagner said it remains to be seen whether these changes will mean fewer businesses, but more resilience in the long term:
“It will be interesting to see whether the changes at Companies House, which may have the effect of weeding out those not serious about setting up a company, will result in a higher proportion of companies surviving, even in difficult economic conditions.”
Although nearly 900,000 new companies were registered in 2023, a portion of those companies were shell entities created for future use, and more than 40,000 companies were subsidiaries of existing companies. Online retail saw the largest number of combinations during that period (82,000), followed by property rental companies (49,000).
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