The UK is seeing an explosion of hidden solo businesses

UK business sign-ups on Stripe have doubled in the past two years, even as official figures show business creation flat or falling, a divergence the payments firm’s economists say points to a boom in one-person businesses that Britain’s statistics simply cannot see.

The analysis, published by Stripe economists Marisa Rama and Ernie Tedeschi on Monday (13 July), was prompted by a challenge from Centre for Policy Studies director Robert Colvile, who noted that Office for National Statistics data showed business creations down 8% in the first quarter of 2026, the opposite of the solopreneur surge Stripe had documented in the United States.

Tedeschi, Stripe’s Chief Economist, previously served as Chief Economist for the White House Council of Economic Advisers and is a non-resident senior fellow at Yale’s Budget Lab.

Why the businesses aren’t being counted

The core problem, the pair argue, is that the UK has no official pathway that counts solo businesses at all.

Companies House statistics exclude sole traders and the self-employed entirely, while the ONS only counts businesses registered for VAT or PAYE, thresholds that many one-person operations never meet.

The United States tracks solo formation through EIN filings and France through its dedicated microentrepreneur regime, but no British equivalent exists.

The Department for Business and Trade attempts to fill the gap by estimating unregistered businesses from the Labour Force Survey, but that survey has lost roughly half its effective sample since Covid-19, falling from around 70,000 individuals surveyed in 2019 to fewer than 35,000 in 2023, with the worst attrition among the young people most likely to be self-employed.

The survey was suspended outright in 2023 and relaunched in 2024 downgraded to “statistics in development”, with the DBT’s business population estimates downgraded alongside it.

The LFS also struggles to capture people whose solo enterprise is a side income – a Substack, a Shopify store or freelance work run alongside a salaried job.

Tax data tells a different story

Tax data tells a different story to the headline business statistics.

Self-assessment income tax receipts have risen more than 70% on pre-Covid levels and reaccelerated by 12% in the most recent year of data, a pattern consistent with growing solo business activity.

The figure comes with caveats: solopreneurs earning under £1,000 do not need to register with HMRC at all, meaning the earliest-stage operators are invisible even here, and self-assessment captures property and investment income as well as self-employment.

The authors used HMRC’s tax information and impact notes to strip out distortions from recent policy changes, including the 2023–2024 cuts to dividend allowances.

Stripe’s own UK sign-up data tracks the surge seen in the US and France almost exactly.

Sign-ups moved closely with Companies House incorporations through the early post-pandemic years before diverging sharply from 2024.

This is the point at which, on Stripe’s reading, uncounted solo formations pulled away from the registered business population. The firm examined whether the growth simply reflected businesses migrating to Stripe from rival platforms, but found migrations falling as a share of sign-ups, indicating the surge predominantly represents net-new business activity.

The authors conclude the UK is likely experiencing a solopreneur boom broadly in line with the US and France, and warn that if solo businesses prove central to an AI-driven economic transition, Britain’s inability to measure them amounts to a major policy blind spot.

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