It’s official – Labour is bad for business! The number of companies in the UK has SHRUNK for the first time EVER since Companies House records began.
Figures from Companies House show that at the end of 2024, there were 5,408,707 firms on the register – a drop of 19,879 from the previous quarter. The “effective register”, which excludes companies in the process of being shut down, plummeted by a massive 59,495.
And the trend is only getting worse! A staggering 203,584 businesses closed their doors in the last three months of 2024 – up 24.6% from the same period the year before. Meanwhile, the number of new businesses being set up collapsed by 15.5%, with just 181,261 launching in that time.
Critics are pointing the finger squarely at Labour’s tax hikes and inflation crisis.
Michael Steed, top tax expert and president of the Association of Accounting Technicians, says small businesses are being strangled by red tape and rising costs. More people are choosing to stay as sole traders rather than register a business – because it’s just not worth the hassle.
He told the Times:
“You’ve got to have a payroll. You’ve got to keep records. You’ve got to keep your minutes, your dividend payments. All those need to be in real time. You’ve got to do your compliance with Companies House. You’ve got to make sure their registers are up to date. You’ve got to do the annual return, filing statutory accounts. Whereas if you compare that to being a sole trader, the only people that know your results are you, HMRC and the Holy Spirit.”
Meanwhile, tax hikes are hammering employers. Chancellor Rachel Reeves jacked up National Insurance for businesses from 13.8% to 15% last October and slashed the salary threshold at which companies must pay. And from April 6, the cost of employing someone on minimum wage will soar by more than £2,000 per worker.
Henry Whorwood, boss of research firm Beauhurst, says it’s a double whammy for business owners. Inflation and tax rises are forcing many to throw in the towel before things get even worse.
He said: “Although capital gains tax has a taper and national insurance hasn’t kicked in yet, if you were looking at the prospects for your business I think it’s completely rational to preemptively decide it might not be worth it and that you may as well go back to letting someone else take the risk and just get a job.”
Companies House says some of the drop is down to new rules, which allow it to strike off businesses that don’t provide the correct registered office address. But the huge collapse in business numbers suggests the real reason is a Labour-made disaster.
With tax hikes, inflation, and endless red tape, Britain’s business owners are being squeezed to death. And under Labour, it’s only going to get worse!
