How fast are UK tech companies being born? The formation boom, by the data

27,417 new UK companies were incorporated in 2025 under SIC code 62012, business and domestic software development, the narrowest and most direct proxy for "someone started a software company." A decade earlier, in 2016, the figure was 6,961¹². That is a 293.9% rise, a 3.9x multiple, in the primary formation measure the site tracks. The growth has not levelled off: the trailing 12 months to April 2026, the most recent settled month, add up to 33,042 new software-development companies, and April itself was up 76.8% year-on-year¹.

This post walks through the formation numbers, the broader 5-code tech cluster they sit inside, and a seasonality pattern in the data that is directly relevant to anyone timing an incorporation: a recurring build-up in formations ahead of the UK tax year boundary on 5 April, followed by a fall-back once the new tax year starts.

The decade: software formations up 293.9%

The clearest read on how fast UK software companies are being born is the primary SIC 62012 code, tracked monthly since mid-2015. The annual totals show the trend is not a recent spike; it has compounded for years, with a visible acceleration from 2023 onward.

Two things stand out. First, the software-development code has grown faster than the wider cluster: 293.9% over the decade against 85.2% for the deduplicated union across all five SIC codes (62012, 62020 IT consultancy, 62090 other IT services, 63110 data processing and hosting, 58290 other software publishing)¹. Software development is outpacing the broader tech-services base it sits inside, not just tracking it. Second, 2025 was the single biggest step up in the series: software-development formations rose from 18,992 in 2024 to 27,417 in 2025, a jump of nearly 9,000 companies in one year, larger than the entire annual total for 2016.

The current run: still accelerating, not just off a low base

A decade-long percentage change can be misleading if the recent run has actually cooled. It has not. April 2026, the latest month with settled (non-provisional) data, recorded 3,818 new software-development companies, itself the highest single month on record for that code, and 76.8% higher than the same month a year earlier¹. The trailing 12 months to that point total 33,042 new software-development companies; the trailing 12 months for the full 5-code union total 68,512, up 85.2% over the decade comparison¹.

The two most recent calendar months in the dataset, May and June 2026, show comparable or slightly higher raw counts (3,839 and 3,780 new software-development companies respectively) but are flagged as provisional in the underlying data, pending full Companies House indexing, and are excluded from the headline decade and year-on-year figures above until they settle¹. They are a useful directional signal that the run is continuing, not a confirmed data point in their own right yet.

Tax-year seasonality: why March is always the peak

Averaged across the full 2016 to 2025 window, tech company formations across all five SIC codes show a consistent pattern: a build-up through March, ahead of the UK tax year boundary on 5 April, followed by a fall-back once the new tax year begins¹. 2023 is a clean illustration: union incorporations across the tech cluster ran at 5,056 in March against 4,107 in April, a fall of 18.8% in a single month¹.

The likely driver is not superstition, it is accounting-period planning. A company incorporated in late March opens its first accounting period right at the start of a new tax year, avoiding a split first period that straddles two tax years and capturing a full year of company-level tax treatment from day one. That timing has real substance behind it: for accounting periods beginning on or after 1 April 2024, the merged R&D scheme applies in full, so a company's incorporation date and first accounting-period start date genuinely determine which regime applies to its earliest R&D spend, not just which tax year its accounts happen to fall in.

None of this means incorporating a day before or after 5 April changes anything for most founders; the substantive planning happens around the accounting-period date and the reliefs a company intends to claim, not the calendar date of incorporation itself. But the aggregate data shows thousands of founders acting on that logic every year, which is why the formation curve has a predictable shape rather than a flat one.

What the boom means for founders incorporating now

A rising formation count is a demand signal, not a survival or viability signal; it says more people are choosing to start software companies, not that starting one has become easier or safer. Two practical implications follow for anyone incorporating into this cohort. First, the first-accounting-period and R&D-scheme timing questions above are not theoretical: getting the merged R&D scheme, SEIS/EIS eligibility windows and statutory compliance set up correctly from incorporation avoids costly rework later, which is the territory our core compliance service covers. Second, a larger, faster-growing formation cohort means more competition for the same investor attention and grant funding, so founders who structure their SEIS/EIS position and R&D claim correctly from day one have a real edge over those who leave it until the first funding round forces the issue; our pre-seed founders hub and, for companies in this specific SIC code, our software development companies hub cover that groundwork in more detail.

A note on what this post is (and is not)

This post and the underlying UK Tech Formations Index track monthly formation velocity and seasonality across five software-focused SIC codes, using gross incorporation counts (dissolved companies remain counted; there is no survivorship bias applied). That is a different measurement from our separate UK Startup Formation and Survival Index, which uses a broader 8-code cluster at annual and quarterly grain and reports the current active-versus-dissolved snapshot rather than the pace of new incorporations. A formation count tells you how many companies were born in a given month; a survival snapshot tells you how many of all companies ever formed are still on the register today. They answer different questions from overlapping but not identical company populations, and the two should not be quoted as if they were the same figure.

Sources

1. Founder Tax Partners: UK Tech Formations Index, compiled from the Companies House Advanced Search API (Companies House public records, Open Government Licence v3.0). Incorporations through June 2026; settled (non-provisional) figures through April 2026. Data pulled 2026-07-23.
2. Companies House Advanced Search API, Companies House. Open Government Licence v3.0.