UK tech sector growing despite Covid-19 impact

Research published by auditors RSM have determined that the number of new tech companies established in the UK rose by 13 per cent in 2020, and highlights the underlying strength of Britain’s thriving technology sector.

According to the report, more than 14,000 tech businesses registered with Companies House in 2020, up 13 per cent compared with registrations in 2019.

Unsurprisingly, the bulk of these new formations took place in the capital, which recorded 7,480 annual incorporations – up 24 per cent compared to the previous year. It was followed by the South East at 1,520 and the North West at 888 new formations.

Nevertheless, the largest regional increase was found in the West Midlands. The figures show that 585 new tech companies staked their claim in the area in 2020 – up 40 per cent compared with 2019.

Scotland (up 12 per cent), Northern Ireland (up 10 per cent), the North East (up seven per cent) and the East Midlands (up three per cent) also proved popular among tech entrepreneurs.

But they come at the expense of Wales, Yorkshire and the Humber, the North West, and the South West, which all saw formations fall compared to the previous year.

Commenting on the figures, David Blacher, head of technology at RSM, said: “Despite the acute impact of the Covid-19 and lockdown restrictions, it’s encouraging to see growth in the UK tech sector as entrepreneurs seize the opportunities that the pandemic has revealed for technology to support new ways of working and digital entertainment.”

He added: “The UK continues to stride ahead of other European countries, despite Brexit, and remains the first-choice tech hub after the US and China.”

According to the latest statistics, the UK tech sector attracted some $15 billion (£10.8 billion) in investment and placed third internationally for tech incubations in 2020.

Registering a limited company is a significant step for any business which is soon to begin trading or looking to formalise the structure of an established operation. Limited companies offer a way to limit a business owner’s liability and provide a distinct legal entity from which to engage with third party customers and suppliers.

For commercial support, including advice on setting up your own limited company, mergers, acquisitions, investment, and corporate finance, please get in touch with Maung Aye at Mackrell.Solicitors today on +44 (0) 20 7240 0521 or at maung.aye@mackrell.com

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Maung Aye
Maung is a partner in our Corporate and Commercial department. He joined Mackrell.Solicitors following corporate law positions in London and in a leading regional firm in Essex. Maung read European Legal Studies at Lancaster University and the Università degli Studi di Trento and is a fluent Italian speaker.