Britain has recorded its highest number of company closures for two decades, with the final quarter of 2024 seeing 198,046 businesses struck off the official register.
The figure, revealed by research firm Beauhurst, surpasses levels last reached in 2021 and in the aftermath of the 2008 financial crisis.
Henry Whorwood, managing director of research and consultancy at Beauhurst, said the increase in business dissolutions is largely a consequence of last year’s budget measures, combined with a difficult financing climate. “We really need to make sure this doesn’t get worse,” he added.
Separately, data from Zempler Bank, a small-business lender, points to an 8 per cent drop in new company formations throughout 2024, taking the total to 807,000. Rich Wagner, chief executive of Zempler, suggested the higher costs and stricter policing of new incorporations could be deterring many would-be entrepreneurs. Last year Companies House was granted new powers and raised incorporation fees from £12 to £50, which coincided with a year-on-year dip of almost 20 per cent in registrations between May and December.
Wagner said it remains to be seen if these changes will mean fewer, but more resilient, businesses in the long run:
“It will be interesting to see whether the changes at Companies House, which may have the effect of weeding out those who aren’t serious about starting a company, result in a higher proportion of businesses surviving, even in challenging economic conditions.”
Despite nearly 900,000 new companies being registered in 2023, a portion of those were shell entities created for future use, and more than 40,000 were subsidiaries of existing companies. Online retail saw the highest number of formations during that period (82,000), followed by property-letting firms (49,000).
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UK sees record wave of business closures amid tough environment