Britain has recorded the highest number of company closures for two decades, with the last quarter of 2024 seeing 198,046 businesses stripped of their official register.
This figure, revealed by research firm Beauhurst, surpasses the levels reached in 2021 and after the 2008 financial crisis.
Henry Whorwood, managing director of research and consultancy at Beauhurst, said the increase in business closures was largely due to last year’s budget measures, combined with the difficult funding environment. “We need to make sure this doesn’t get worse,” he added.
Separately, data from Zempler Bank, a small business lender, points to an 8 percent decline in new companies by 2024, taking the total to 807,000. Rich Wagner, Zempler’s chief executive officer, suggested that high costs and strict policing of new companies could deter many would-be entrepreneurs. Last year Companies House was given new powers and increased incorporation fees from £12 to £50, with a year-on-year dip of almost 20 per cent in registrations between May and December.
Wagner said it remains to be seen whether these changes will mean fewer, but stronger businesses in the long run:
“It will be interesting to see that the changes taking place at Companies House, which can have the effect of removing those who are not willing to start a company, lead to a high number of heavy businesses, even in difficult economic conditions.”
Despite nearly 900,000 new companies registered by 2023, half of those were shell companies created for future use, and more than 40,000 were subsidiaries of existing companies. Online sales saw the highest number of properties during that period (82,000), followed by real estate firms (49,000).