Pay to Play - How Companies House Fee Increases Reshaped Formation

Companies House Fees: The Assumption Everyone Made

If you were to ask most directors what higher Companies House fees would mean, you’d probably get a recurring answer; fewer company formations. Higher barrier to entry, fewer people bother. It's an intuitive assumption, and for a while, the data agreed with it.

Between May 2024 and February 2026, Companies House pushed two of the steepest fee increases in its history. The cost of forming a company online rocketed from £12 to £50 to £100; a 733% increase in under two years. Bear in mind that this was on a fee that hasn't budged since 2016. Companies House fees also rose sharply for the annual confirmation statement. The filing every single active company is required to make by law, nearly quadrupled, from £13 to £50.

Company formations fell sharply for a while, but the full eighteen-month picture is really two stories; a genuine slowdown in new companies being incorporated, and arguably a more significant story about directors deciding it's no longer worth keeping their company alive.

How much have Companies House fees increased?

Both increases came from the same source: the Economic Crime and Corporate Transparency Act (ECCTA), which handed Companies House new investigative and enforcement powers and told them to fund it themselves. The fees rose to cover the cost of compulsory identity verification, tighter data checks, and a more active regulatory role.

Notice anything about that last row? While it cost more to start and maintain a company, it got cheaper to close one down. Companies House cut the strike-off fee by more than half in February 2026. Do you think that is an accident? I believe it matters more than it first appears.

What actually happened to new Company Incorporations?

Below I have outlined the annual incorporations in the UK, alongside the Year-on-Year change:

A 10% dip, then a recovery. Not nothing, but not a complete collapse either. It is best to look at the quarter-by-quarter picture.

The quarter before the May 2024 rise (Jan–Mar 2024) posted 244,717 company incorporations, up 10.2% on the year. Potentially this was directors and formation agents front-loading applications to beat the deadline and the fee increase. Then, once the new fees landed, growth didn't just slow, it reversed: Jul–Sep 2024 saw the slowest register growth since quarterly reporting began in 2012, with company incorporations down 12.6% year on year. The next quarter was even worse, down 15.5%.

By mid-2025, things had partially recovered, one quarter up 12.7% on the year before. But as the next February 2026 increase approached, the same pattern started to repeat itself; a rush of filings in January, then a quarter that still closed 3.1% below the same period in 2025. 

Are directors closing more companies because of higher Companies House fees?

There is another side to the story: company dissolutions. Here's what gets missed if you only track incorporations: dissolutions rose at the same time. Directors closed up shop 663,167 times in 2023/24. That climbed to 726,813 in 2024/25, a 9.6% jump.

Put the two trends together and something unusual happened. In October - December 2024, for the first time since Companies House started publishing quarterly figures in 2012, the companies register shrank.

During this quarter:

• 181,261  companies were incorporations
• 203,584  companies were dissolved

That is directors actively deciding that their company is no longer worth the higher annual costs imposed by the UK Government.

Companies House didn't just raise the cost of forming and running companies, it simultaneously made it cheaper to walk away from one. The fee structure now nudges quite deliberately in one direction: keep a company, but only if it's trading. 

So What Does This Actually Prove?

What the data supports is specific: the Companies House fee increases appear to have changed the economics of an inactive company far more than they have changed the appetite to start a genuinely active one. The company register is still growing, it hit a record 5.48 million companies in March 2026, and 815,280 new companies still formed in the last financial year alone. Entrepreneurs haven't stopped incorporating, but the population of companies kept on the register 'just in case' looks to be shrinking.

The question for the UK's millions of company directors is therefore not simply whether Companies House fees will affect the number of new businesses being created, but whether they will change the number of businesses that remain on the register.