UK Online Seller Company Formations: A Decade of Data and the 2026 Cooldown

Every few months a new "online selling is booming" headline does the rounds, usually built on a single growth statistic pulled out of context. The Companies House register tells a more complete story: incorporations of UK online-seller businesses (SIC 47910, retail via mail order or the internet) did rise sharply over the past decade, but the growth was not smooth, it peaked in 2023, and the most recent data shows a year-on-year decline. If you are weighing up whether to form a limited company for your Amazon, eBay, Etsy or Shopify business, the shape of that curve matters more than the decade headline alone. This page is built entirely from our own online seller business index¹, which tracks Companies House incorporation and dissolution data for the sector on a quarterly cadence.

The decade in numbers

SIC 47910 incorporations rose from 10,316 in 2016 to 78,065 in 2025, a change of 656.7% and a 7.6x multiple¹². That is the number most "online selling is booming" content stops at. It is accurate, and it understates how much the growth has already reversed.

The actual peak year on record is 2023, at 84,126 incorporations, not 2025. 2025's total sits below 2023's. The single busiest month in the entire series is April 2024, at 10,015 incorporations in that one month¹, a spike well above the surrounding months that is worth treating as an outlier rather than a trend line on its own.

The lockdown boom and the pullback since

Quarterly net incorporations (new companies minus dissolutions in the same quarter) show the shape of the cycle more clearly than annual totals. In 2021-Q1, at the height of the pandemic e-commerce surge, SIC 47910 added a net 10,048 companies to the register in a single quarter¹. That net figure fell steadily through 2022 and 2023, turned negative in 2024-Q4 (-5,084 net) and stayed negative through 2025-Q1 (-3,919 net), before a fragile recovery: +485 in 2025-Q2, +566 in 2025-Q3, +1,813 in 2025-Q4, +64 in 2026-Q1, and +5,098 in 2026-Q2¹. The register is growing again, but at roughly half the rate it was adding companies at the start of 2021.

The most recent data: a 13.4% year-on-year decline

The latest settled month in the dataset is April 2026, with 5,976 SIC 47910 incorporations, down 13.4% on the same month a year earlier. The trailing twelve months to that point total 76,885 incorporations¹. The adjacent SIC 47990 segment (other non-store retail, tracked separately and never blended into the 47910 headline) is falling faster still: down 28.8% year-on-year, with a trailing twelve-month total of 14,828¹. Both codes are cooling at the same time, and the secondary code is cooling harder, which is a useful early-warning cross-check rather than noise from a single data series.

What happened to the companies formed in the boom

A rising formation count does not tell you how many of those companies are still trading. Companies House cohort data lets you follow a formation-year group forward and see what share are still on the register one, two and three years later¹², published in full on our online seller survival index⁴.

The 2021 cohort, the year the lockdown formation boom peaked, survives measurably worse than the 2018 or 2019 cohorts at the same age: 71.2% reached year 1 against 78.8% (2018) and 86.9% (2019), and 31.6% reached year 3 against 47.1% (2018)¹. The 2022 cohort looks worse again at every measured age, though it has had less time to run. Survival by year is a stronger signal than the raw active count, because survivalByYear compares cohorts at the same age, while a snapshot active percentage is inflated for recent cohorts simply because they have not had time to fail¹.

The active register today

As at the most recent pull date, 214,765 SIC 47910 companies are active on the Companies House register, against 319,825 dissolved, for 534,590 ever registered¹². That produces a snapshot active rate of 40.2%. This is explicitly not a cohort survival rate: it mixes companies of every age, from those formed last month to those formed a decade ago, and it is inflated by the large volume of recently formed companies that have not yet had time to dissolve¹. The cohort table above is the more reliable read on how long a newly formed online-seller company actually tends to last.

The demand backdrop: what ONS retail data shows

Company formation is a supply-side signal. The ONS Retail Sales Index series J4MC, internet sales as a proportion of all retail sales, is the demand-side anchor¹³. Internet retail's share of all UK retail sales rose from 19.2% in 2019 to 28.1% in 2020 and peaked at 30.7% in 2021, then fell back to 26.6% in 2022 and has held broadly flat since: 26.7% in 2023, 27.1% in 2024, 27.4% in 2025¹. Company formations, by contrast, kept climbing through 2023 before falling. The two series decoupled: online retail's share of the market stopped expanding after 2021, but incorporations did not turn down until two years later. That gap is consistent with a formation wave that outran the underlying demand growth, and with the weaker survival numbers for the cohorts formed inside that gap.

What this means for the sole trader vs limited company decision

None of this data changes the tax comparison between trading as a sole trader and incorporating; that comparison runs on profit level, extraction need and stock reinvestment, covered in full in sole trader or limited company for online sellers. What it changes is the backdrop against which that decision gets made. Forming a company today is not riding the same wave as 2020 to 2023: net incorporations in the most recent quarter (2026-Q2, +5,098) are running at roughly half the rate of the 2021-Q1 peak (+10,048), and the latest settled month is down 13.4% year-on-year. If your reason to incorporate is "everyone else is doing it", the data no longer supports that as a majority trend the way it did three years ago. If your reason is the profit and reinvestment maths in the linked comparison, that maths has not changed and does not depend on the formation cycle.

The survival data adds a second, separate point worth weighing. A large share of the companies formed in the 2021 boom did not make it past year two. Some of that is normal business attrition; some of it likely reflects companies incorporated quickly, without much planning, while the formation rate was accelerating. A seller incorporating now, in a slower and more deliberate formation environment, is not exposed to that same dynamic simply by forming a company, but it is a reminder that incorporation itself is not a growth strategy. See the Amazon seller hub and the Shopify seller hub for platform-specific structure considerations, and use the sole trader vs limited company calculator to run your own numbers rather than relying on the formation cycle as a signal either way.

Common misreadings of this data

Treating the decade headline as still-accelerating growth. The 656.7% rise from 2016 to 2025 is real, but the actual peak year was 2023 (84,126), and the trend has been negative on a year-on-year basis in the most recent settled month. Quoting the decade multiple alone, without the 2023 peak and the current -13.4% year-on-year figure, presents an incomplete and outdated picture.

Confusing the active count with a survival rate. 214,765 active companies and a 40.2% snapshot active rate sound like a health metric, but the snapshot mixes companies of all ages and is inflated by recent formations that have not had time to dissolve. The cohort survival table, which compares companies at the same age, is the more reliable measure.

Ignoring the secondary SIC code as a leading indicator. SIC 47990 is down 28.8% year-on-year, steeper than 47910's -13.4%. Tracked separately by design rather than blended into the headline, it is nonetheless moving in the same direction, and further ahead in the decline.

For the full dataset, methodology notes and caveats behind every figure on this page, see the UK online seller business index and the online seller survival index.

Sources

1. UK Online Seller Business Index and Online Seller Formation Seasonality, /research/online-seller-index. Compiled from Companies House public records under the Open Government Licence v3.0. Data pulled 2026-07-15, seasonality data generated 2026-07-23.
2. Companies House Advanced Search API. developer.company-information.service.gov.uk. Published under the Open Government Licence v3.0.
3. Office for National Statistics, Retail Sales Index, series J4MC (internet sales as a proportion of all retailing). ons.gov.uk. Published under the Open Government Licence v3.0.
4. UK Online Seller Survival Index, /research/online-seller-survival-index. Formation-year cohort survival, compiled from Companies House public records under the Open Government Licence v3.0.