- UK tech incorporations reach five-year high despite funding slowdown
- 13,802 tech incorporations in Q1 2024, up 11% from previous year
- Record year in 2023 with 51,017 new startups
- London leads in tech incorporations, followed by South East and North West
- Cost of incorporating a UK business rises from £12 to £50, aimed at improving business register integrity
UK Tech Incorporations on the Rise
The tech industry in the UK has seen a surge in incorporations, reaching a five-year high at the beginning of this year. Despite a slowdown in venture capital funding, the sector remains robust, with 13,802 tech incorporations recorded in the first quarter of 2024. This marks an 11% increase compared to the same period the previous year. The data, analyzed by accountancy firm RSM, highlights the resilience and growth potential of the UK tech landscape.
Record Year for UK Tech Startups
In 2023, the UK witnessed a record-breaking number of tech incorporations, with a total of 51,017 new startups entering the market. This upward trend indicates a thriving ecosystem that continues to attract entrepreneurs and investors alike. Ben Bilsland, a partner at RSM UK, emphasized the strength in depth of the UK’s tech sector as a key driver behind this growth. He encouraged tech entrepreneurs to collaborate, innovate, and grow together with other businesses in the industry.
Regional Insights: London Leads the Way
Across the 12 regions of the UK, tech incorporations have shown significant growth, with all regions except Wales and the South West experiencing an uptick in new startups compared to the same period in 2023. Unsurprisingly, London led the pack with 7,253 new firms incorporating in the first quarter of the year. Following closely behind were the South East and the North West, demonstrating the widespread appeal and distribution of tech innovation across the country.
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Impact of Increased Business Registration Costs
Recently, the cost of registering a new business on Companies House, the process of incorporating a UK business, saw a substantial rise from £12 to £50. While this increase has sparked concerns, the government agency justified it as a measure to enhance the integrity of the business register and combat fraud. Joseph Murray, a startup advisor at Start Up A-Z, pointed out that small businesses may feel the brunt of this cost hike. However, he also highlighted the potential benefits of a more robust public register, which could instill greater confidence in UK businesses among stakeholders.
The surge in UK tech incorporations paints a positive picture of the industry’s resilience and growth trajectory. Despite challenges such as funding slowdowns and increased registration costs, the sector continues to thrive, fostering innovation and collaboration at both regional and national levels. As the UK tech ecosystem evolves, opportunities for tech entrepreneurs to make their mark and contribute to the digital economy remain abundant.
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