Government figures show 23% increase in UK companies folding

As Gloucestershire sees 20% drop in new business start-ups

4 June, 2025, UK: Official Government figures uncovered by leading Gloucestershire law firm, WSP Solicitors, show a sharp increase in company closures nationally since October's Budget, up 23% from 350,169 to 432,026 compared to the same period the year before. Incorporations also dropped 16% from 513,298 to 430,882.

Companies House data, analysed by WSP’s corporate law team, found locally in Gloucestershire there was a 20% decline in start-ups in just one year. Incorporations fell to 685 since Labour’s Autumn Budget announcement on 30th October, down from 862 during the same period the previous year.

The marked decrease was also evident six months prior to the Autumn Budget, just ahead of the new government being elected, where the number of new businesses was already down 15%.

Equally, the number of local companies dissolved is creeping up - a 3% increase since October last year compared to the year before.

Peter Mardon, Commercial Director at WSP Solicitors, which is based in Gloucester and Stroud, said: “The Government’s Autumn Budget sent shockwaves across organisations in Gloucestershire, with increases to both Employer National Insurance Contributions (NIC) and the minimum wage hiking up labour costs. Business Asset Disposal Relief - which is valuable financial relief for owners when they sell their business - has also risen since, from 10% to 14%, and will only go up again to 18% in April next year. The combination of these tax rises, on top of what was already a fragile business environment, has seen businesses close or be sold and business owners exit.

“There is a sense that the Government’s persistent tax hikes on businesses are creating an anti-entrepreneur environment, especially when we read reports that a record number of millionaires left the UK last year. Our data echoes this sentiment with signs of fewer people forming new companies in the county, alongside the number of organisations closing their doors.”

WSP’s findings follow the latest ONS reports in May, showing the sharpest rise in UK unemployment in nearly four years, at 4.5% in the first three months of this year, up 0.2% on the previous quarter and the highest since the summer of 2021, as the job market continues to slow.

Peter added: “The jobs market is beginning to stall UK wide, which is a likely consequence of rising taxes, soaring operational costs and a slowdown in business creation, all of which is putting the brakes on hiring.

“If the financial reward no longer justifies the risk, pressure, and long hours required to build and run a business, fewer people will see the point in trying or continuing, which is bad news for the county’s future economic prosperity.

“For business owners looking to exit then it’s critical to start planning now to get ahead of the second hike in the Business Asset Disposal Relief rate next year. This is especially true if you’re a family-owned business facing new inheritance tax laws from April 2027, which includes bringing previously exempt assets such as inherited pensions and death benefits into the scope of IHT.” 

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This data has been taken from the Companies House website and refers to the date period 30th October 2024 to 13th May 2025.

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Editors notes

WSP Solicitors has been at the heart of Gloucestershire since 1758, formed following the merger of three local firms: Winterbothams, A E Smith & Son and Penleys. 

The firm’s ethos is to make life less complicated through everything it does from the legal advice it offers individuals and businesses down to its fees. With offices in the Cotswold town of Stroud and in Gloucester, the firm now has a team of 65 providing a wide range of personal and business legal services including: 

·        Commercial contracts  

·        Commercial property  

·        Buying and selling businesses  

·        Residential property conveyancing  

·        Child and family law  

·        Separating together – out of court family law services  

·        Wills, trusts and probate 

·        Dispute resolution 

In 2024, WSP Solicitors was shortlisted in the Best Place to Work category at the SoGlos awards and the Customer Excellence category at the Circle 2 Success awards. In 2025, the firm was listed as finalists in Talent Training and Development and Customer Excellence at the Circle 2 Success awards.