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Companies House register drops for the first time since 2012

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Companies House register drops for the first time since 2012
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The Companies House register has shrunk for the first time since 2012 - a stark indicator of the economic headwinds facing UK businesses. While various factors contribute to this downturn, it's difficult to ignore the impact of fiscal policies. Rachel Reeves' budget, while aiming to stimulate growth in certain sectors, has introduced measures that may inadvertently be dampening entrepreneurial spirit. For many, the cost and complexity of setting up a business now feels more daunting, especially amidst ongoing economic uncertainty.


Moreover, the current economic climate, alongside rising inflation and fluctuating interest rates, is creating a high-risk environment for startups. Potential entrepreneurs are likely weighing the increased costs of borrowing and the challenges of securing initial funding against the backdrop of a potentially shrinking consumer market.


A decrease in new company registrations signals a potential slowdown in innovation. Without a steady influx of new businesses, the UK economy risks stagnation, particularly in sectors reliant on entrepreneurial dynamism.


How company formation registrations have changed year-on-year:


Since the start of the year, there has been close to an even split between businesses starting and businesses closing. And when looking at the first two weeks of March alone, over 34,000 businesses have dissolved. 


No. of businesses set up from January 1st to 13th March 2025

No. of businesses dissolved from January 1st to 13th March 2025

166,944

164,357


This time a year ago, there were 18% more businesses set up, with fewer dissolving.


No. of businesses set up from Jan 1st to 13th March 2024

No. of businesses dissolved from January 1st to 13th March 2024

197,292

138,302


Source: Companies House


Looking ahead, this trend could significantly impact business confidence throughout the year. If the government doesn't address the underlying concerns of aspiring entrepreneurs, we may see a continued decline in new formations. This would not only affect the overall economic health but also exacerbate regional disparities, as certain areas may struggle more than others to attract new businesses.


What to do if you’re thinking of starting a business


If you’re looking to start your own business this year, there are a few things you’ll need to take care of. Following these steps can improve your chances of success and give you peace of mind that you’ve taken care of everything.


  • Forming your company: You’ll need to legally form your company through Companies House which willcost you a £50 registration fee. Here at SUAZ, we can take care of this for free, you’ll just need to decide on your business name.

  • Set up a business bank account: There are a variety of banks that offer great incentives for having a business bank account. We’ve listed a few in our starting a business guide.

  • Choose your business legal structure: From sole trader to private limited company to public limited company, it’s important to understand the right legal structure for your business, with each having its own benefits and challenges. Check out our guide on legal considerations when starting a business. 

  • Understand your tax obligations: Every business in the UK, regardless of its size or structure, needs to be registered with HMRC. You’ll need to file annual returns and keep on top of your taxes. Limited companies are required to pay corporation tax on their profits, and you may need to register for VAT if your business turnover exceeds the VAT threshold


Here at SUAZ we’re on hand to help form your company at no expense. 


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