New tech incorporations down in Q1, with tariff uncertainty set to stall future growth

The number of new UK technology incorporations dropped 12% in Q1 2025 compared to last year, with tariff disruptions and global economic uncertainty likely to hinder future growth in the sector, according to leading audit, tax and consulting firm RSM UK.

RSM’s analysis shows a total of 12,184 new tech companies were incorporated in Q1 2025, down from 13,801 in the same period last year. Most UK regions saw a decrease, with London falling from 7,253 in Q1 2024 to 5,960 in Q1 2025. 

Despite the year-on-year decline, the number of incorporations increased 10% quarter-on-quarter from 11,031 in Q4 2024 to 12,184 in Q1 2025 – the first quarterly increase since Q1 2024.

Ben Bilsland, partner and head of technology industry at RSM UK, comments: “Despite new tech incorporations falling year-on-year, it’s encouraging to see some growth quarter-on-quarter, after declining for three consecutive quarters. Economic uncertainty has taken hold in the tech sector, with business leaders being increasingly cautious about making investment and recruitment decisions. 

“The complexity around tariffs causes disruption for the technology sector. The recent news around Apple delaying iPhone shipments intended for the US market is a high profile example. Many tech companies are reviewing their supply chains as they look to move hardware or equipment from one country to the next.

“The US government has indicated they will look for concessions from the UK around digital taxes and their own tech sector as they look to negotiate a trade deal. It is unclear what the consequences will be for UK tech yet, but the sector will be watching closely for decisions that either stifle or encourage growth of homegrown companies.   

“The technology industry has a big part to play in the government’s growth agenda, but it cannot do this without the necessary resources. What’s needed is urgent action from the government, including clarity around support and policies that cultivate growth.” 

Number of new technology company incorporations – year-on-year comparison

Number of new technology company incorporations – quarter-on-quarter comparison