UK Contractor Survival Index
36.9% of contractor-sector businesses born in 2019 were still active five years later
How long UK contractor-sector businesses actually last, tracked cohort by cohort from ONS Business Demography data, and compared against the all-industries UK average.
Key facts
- Of the 57,930 contractor-sector enterprises born in 2019, 36.9% were still active five years later, against a 38.4% average across all UK industries.
- 95.2% of the 2023 cohort survived their first year, +1.8pp against the 93.4% all-industries figure.
- Survival tracks closely against the all-industries baseline through the first few years, then falls slightly behind it by year 5, a -1.5pp gap in the 2019 cohort.
- The three contractor SIC groups do not move identically: see the breakdown table below for group 62 (IT), 70 (management consultancy) and 71 (engineering) individually.
Source: Office for National Statistics, Business Demography (Table 5.2a-5.2e), under the Open Government Licence v3.0. Figures may be cited with attribution to Contractor Tax Accountants.
The survival curve: 2019 birth cohort
Of every 100 contractor-sector enterprises that started trading in 2019, the chart tracks how many were still active at each anniversary, against the same measure for all UK industries combined.
Survival by birth-year cohort
Each row is a different birth-year cohort, tracked independently. More recent cohorts have fewer years of data available; blank cells mean that survival year has not yet elapsed and ONS has not yet published it. Figures are the combined contractor SIC group (62, 70 and 71 births and survivors summed before dividing).
| Birth year | Births | 1yr | 2yr | 3yr | 4yr | 5yr |
|---|---|---|---|---|---|---|
| 2019 | 57,930 | 96.0% | 77.0% | 56.2% | 43.7% | 36.9% |
| 2020 | 43,060 | 94.5% | 74.8% | 56.3% | 47.2% | n/a |
| 2021 | 41,845 | 95.1% | 76.1% | 61.9% | n/a | n/a |
| 2022 | 39,520 | 95.0% | 77.6% | n/a | n/a | n/a |
| 2023 | 40,920 | 95.2% | n/a | n/a | n/a | n/a |
Row-by-row figures are for the combined contractor SIC group. The all-industries comparison figures are in the CSV download below.
1-year survival rate over time
The one figure available for every cohort in the series is 1-year survival. It has stayed above 94% in every birth-year cohort published so far, with no clear deterioration through the post-pandemic and cost-inflation period.
By contractor SIC group
The three groups behind the combined figure, for the 2019 birth cohort (the most recent with a full 5-year curve).
| SIC group | What it covers | Births (2019) | 5yr survival |
|---|---|---|---|
| 62 | Computer programming, consultancy and related activities | 21,730 | 34.5% |
| 70 | Activities of head offices; management consultancy activities | 25,760 | 38.2% |
| 71 | Architectural and engineering activities; technical testing and analysis | 10,440 | 38.5% |
Methodology and sources
Data source. The Office for National Statistics (ONS) Business Demography release tracks "enterprises", businesses registered for VAT or PAYE, from the year they are first active ("born"). Each birth-year cohort is followed for up to five years, and Table 5.2a to 5.2e report the count and percentage still active at each anniversary, broken down by SIC 2007 group. We use groups 62, 70 and 71, the closest match to the SIC codes used in our UK Contractor Index.
Combined figure. The "contractor" series sums raw births and survivor counts across groups 62, 70 and 71 before dividing, so it is an exact weighted figure across the three groups, not an average of three percentages.
Enterprise, not company. This is a different unit and a different source to our UK Contractor Index and UK Contractor Insolvency Index, which both track Companies House limited companies specifically. The ONS enterprise measure is broader: it includes sole traders and partnerships registered for VAT or PAYE as well as limited companies. The datasets should not be combined into a single figure.
Caveats. Figures are control-rounded to the base 5 by ONS. "Survival" means the enterprise is still active in the ONS Inter-Departmental Business Register; it does not mean the business is profitable, growing, or trading under the same name or ownership. SIC groups 62, 70 and 71 are broader than the exact contractor SIC codes tracked elsewhere on this site, so figures here include some non-contractor businesses within the same groups. More recent birth-year cohorts have fewer years of survival data published, purely because less time has elapsed since they were born, not because of any data gap.
Updated. Table 5.2a-5.2e was last published 2025-11-20. Data generated 2026-07-23.
- Business Demography 2024 reference tables (Table 5.2a-5.2e) (Office for National Statistics)
Download the survival data (CSV)
Free to cite and republish with attribution to Contractor Tax Accountants. This page is a data summary and does not constitute tax or business advice on any individual situation.
Starting or running a contracting business? Get your tax position right from day one.
Survival averages are no guarantee for any individual business, but getting your IR35 status, expenses and salary and dividend split right protects the cash your company needs between contracts. Our calculators show what you would actually keep, inside or outside IR35, on 2026/27 rates.
Frequently asked questions
What does the UK Contractor Survival Index measure?
It tracks cohorts of newly-born enterprises (businesses registered for VAT or PAYE in a given year) in the three SIC 2007 groups closest to contracting, group 62 (computer programming, consultancy and related activities), group 70 (activities of head offices and management consultancy) and group 71 (architectural and engineering activities and technical testing), and measures what percentage are still active 1, 2, 3, 4 and 5 years later. The data comes from the Office for National Statistics (ONS) Business Demography release. Each birth-year cohort is tracked independently, so the most recent cohorts only have 1 or 2 years of survival data published so far.
Why use SIC groups 62, 70 and 71 as a contractor proxy rather than exact SIC codes?
The ONS survival tables only break results down to 2-digit SIC group level (occasionally 3-digit), not the specific 5-digit codes this site's UK Contractor Index tracks (62020, 70229, 71121 and 71122 among them). Group 62, 70 and 71 are the closest available match, but they are broader: group 62 includes games studios and software product companies alongside IT consultancies, group 70 includes PR and communications firms alongside management consultants, and group 71 includes architecture practices alongside engineering consultancies. Read the survival figures as directionally representative of the contractor-heavy part of the economy, not as an exact PSC survival rate.
How can contracting businesses survive at roughly the all-industries rate when they are mostly one-person companies?
The all-industries comparator in this dataset covers every registered enterprise in the UK, from single-person consultancies to large manufacturers, so it is a genuinely broad baseline, not a small-business benchmark. Contractor SIC groups track close to that baseline through most of the curve, running slightly behind on the 5-year figure. A single-director personal service company can close for reasons that have nothing to do with financial distress, most commonly the contractor returning to permanent employment, retiring, or simply not renewing the company once a contract ends, so 'survival' here should not be read as a proxy for business failure alone.
Where does this data come from?
The Business Demography release from the Office for National Statistics (ONS), specifically Table 5.2a to 5.2e, 'Survival of newly born enterprises, SIC 2007 group.' It is published under the Open Government Licence v3.0 and updated annually, typically in November. Figures are control-rounded to the base 5 by ONS before publication.
Does this mean my contracting business is likely to survive?
The survival rates are averages across broad SIC groups and say nothing about any individual business. What is within a contractor's control is the practical side, keeping on top of IR35 status, claiming the expenses you are entitled to, and structuring salary and dividends efficiently, all of which affect how resilient a personal service company is through a quiet patch between contracts. Our take-home calculators show what you would actually keep, inside or outside IR35, on current rates.