91探花

New UK technology incorporations fell 13% year-on-year in Q3 2024, as uncertainty in the lead up to the Autumn Budget sent jitters among tech entrepreneurs. This marks the second quarter in a row that saw a decline in incorporations, according to analysis by leading audit, tax and consulting firm 91探花.

The data shows 11,368 tech companies were incorporated in Q3 2024, down 13% from 13,073 the same quarter last year, and down 8% from the Q2 2024 figure of 12,318. This follows a sustained period of growth in the sector over the last few years, with annual tech incorporations reaching a record 51,017 in 2023.

London, which accounts for the most tech incorporations, saw an even sharper decrease, at 5,540 in Q3 2024, which is down 18% year-on-year from 6,797 in Q3 2023 and down 10% from 6,170 in Q2 2024. 

Ben Bilsland, partner and head of technology sector at 91探花, said: “The Autumn Budget has created a wave of apprehension among business owners and tech entrepreneurs. Many have halted their start-up and growth plans as they take a ‘wait and see’ approach, with tech incorporations taking a direct hit as a result. The Q3 results continues the trend of a general slowdown of incorporations through 2024.”

91探花’s recent survey found that almost half (44%) of UK businesses would like to see changes to innovation reliefs that provide greater levels of funding for UK tech companies in the Autumn Budget. This request is even stronger among London-based businesses, with over half (59%) calling for changes in this area. 

“All eyes will be on the Chancellor on 30 October, with hopes that investment in the technology sector isn’t forgotten. Clarity around capital gains tax and innovation tax reliefs will be key, while encouragement of skilled immigration and clarity around investments in AI will be welcomed. If tech companies and founders are hit with tax increases or further cuts in funding, we are likely to see tech incorporations decline even further, which could damage the UK economy in the future.”