New tech incorporations hit record high, but tax rises in Budget risk derailing progress
The number of new technology companies incorporated reached another record high in Q3 2026, but the resilience of entrepreneurs will be put to the test if tax rises are announced in the Budget, according to leading audit, tax and consulting firm RSM UK.
RSM’s analysis shows there were 19,545 new tech incorporations in Q3 2026, jumping 26% from 15,470 the same quarter last year and up 3% from 18,997 in Q2 2026.
London remained the largest hub, recording 9,604 new companies, and accounting for nearly half (49%) of the UK total. Almost all UK regions saw year-on-year growth except for Wales, which had unusually strong growth in Q3 2025.
Ben Bilsland, Partner and Head of Technology industry at RSM UK, said: “A third consecutive record quarter in tech incorporations shows entrepreneurial confidence in UK tech is remarkably resilient. The UK continues to be a major hub for innovation and new ideas in tech. Growth isn’t confined to London, with strong progress across Scotland, the East of England and the North East, pointing to a broader pipeline of founders building businesses around AI, software and regional innovation clusters.
“The wider investment landscape reinforces that confidence among business leaders. UK startups raised $17bn in the first half of 2026, the strongest opening half since 2022, with AI attracting the majority of capital. However, founders should not mistake headline funding figures for easy access to finance. Investment remains concentrated in AI and larger late-stage rounds, while borrowing costs are still restrictive for fledgeling businesses.
“The challenge is turning this record number of new company incorporations into sustainable, scalable businesses. Above target inflation and renewed cost pressures - including higher energy and technology input costs - point to a tougher environment next year, which could squeeze margins and keep funding costs higher for longer. To convert startup momentum into productivity, jobs and exports, the UK needs policies that promote deeper domestic growth capital, faster planning and grid connections, and a stronger pipeline of technical skills. Increasing the tax burden with changes to capital gains tax in the Budget will only discourage entrepreneurship, and risks making the UK less competitive.”