Which construction trades are going limited? Company incorporations by trade, ranked

The scale of construction incorporation

In 2025, across all 19 construction SIC codes on the Companies House register, 67,839 new construction companies were incorporated in the UK.^[1] That is a gross figure: Companies House counts every registration, including companies that subsequently close, so it reflects the flow of new incorporations rather than the stock of active businesses. Domestic builders (SIC 41202) alone accounted for 16,527 of those. Among the specialist trade segments that make up the bulk of CIS subcontract work, the picture is sharply uneven. Two trades, electricians and plumbers, together account for more than 14,500 new companies. The remaining six trades in this analysis combined account for fewer than 10,000.

This piece sets out the 2025 annual incorporation count, the trailing 12-month (TTM) figure, the year-on-year change, and the decade-long trend for each of the eight core trade segments. It then connects the pattern to the question every subcontractor in those trades eventually faces: does going limited actually work for me, and at what profit level?

The eight trades ranked by 2025 incorporations

The table below ranks all eight trades from highest to lowest 2025 annual incorporation count. TTM is the trailing 12-month count to April 2026 (the last settled month). Year-on-year change is calculated from the same trailing 12-month window compared with the prior period.^[1]

Rank	Trade	SIC code	2025 incorporations	TTM	YoY change	2016 incorporations	Growth 2016-2025
1	Electricians	43210	7,507	7,886	+22.4%	5,176	+45%
2	Plumbers / HVAC	43220	7,001	7,284	+18.1%	3,740	+87%
3	Painters / decorators	43341	3,241	3,202	-6.2%	1,463	+122%
4	Joiners	43320	2,826	3,207	+51.0%	2,118	+33%
5	Flooring contractors	43330	1,718	1,771	-1.1%	1,011	+70%
6	Plasterers	43310	1,489	1,389	-12.8%	851	+75%
7	Groundworks	43120	742	714	0.0%	676	+10%
8	Demolition	43110	368	360	-41.4%	244	+51%

Source: UK Construction Index compiled from Companies House public records under the Open Government Licence v3.0.^[1] Counts are gross (dissolved companies remain on the register). TTM to April 2026. The most recent two months are provisional due to Companies House indexing lag and are excluded from headline YoY comparisons.

Trade by trade: what the numbers mean

1. Electricians (SIC 43210) -- 7,507 in 2025, TTM 7,886, +22.4%

Electricians are the dominant trade for new construction incorporations, and the TTM acceleration to 7,886 indicates the trend is still running upward rather than peaking. The 2016 base of 5,176 gives a 45% decade-long rise. What explains the volume? Electrical installation sits in a structural sweet spot for incorporation: the work is nearly all labour (minimal materials cost means nearly all of a CIS payment base falls in the deductible labour element), contracts tend to be ongoing and repeat rather than single-project, and the combination of high-volume deductions and steady cashflow pressure makes the real-time EPS offset genuinely valuable. Electricians on steady subcontract income who are suffering 20% CIS across a full year have a quantifiable cashflow benefit from recovering that monthly rather than at Self Assessment.

For detailed guidance on how electrical contractors are registered and work under CIS, see our page for electricians under CIS.

2. Plumbers and HVAC installers (SIC 43220) -- 7,001 in 2025, TTM 7,284, +18.1%

Plumbers have seen the steepest decade-on-decade growth of any trade in this analysis: from 3,740 in 2016 to 7,001 in 2025, an 87% rise in new annual incorporations. The TTM growth of +18.1% confirms momentum is continuing. The drivers are broadly similar to electricians: labour-dominant contracts, steady and repeat work, CIS deductions that accumulate meaningfully across a year, and heat pump and retrofit work creating a new tranche of growing businesses that are structuring more professionally from the outset. On heat pump installs in particular, where government scheme payments flow through larger contractor chains, the contractor due-diligence requirements under the April 2026 GPS rules are already pushing smaller plumbing businesses towards structured entities.

See our page for plumbers and HVAC installers under CIS for trade-specific guidance.

3. Painters and decorators (SIC 43341) -- 3,241 in 2025, TTM 3,202, -6.2%

Painters are the third-largest trade by volume, and their decade-long growth is striking: from 1,463 in 2016 to 3,241 in 2025, a 122% rise, the largest percentage increase over the full decade of any trade in this analysis. The recent year-on-year softening of -6.2% (TTM 3,202 versus a higher prior period) suggests a plateauing after rapid growth rather than a structural shift. Painting and decorating is a lower-barriers-to-entry trade where sole trader is the dominant structure at start-up, and the high decade-long incorporation rate may reflect a cohort of more established painters choosing to professionalise as turnover grows past the income tax higher-rate threshold. The data is consistent with a trade where incorporation is a considered choice made after a few years trading rather than a starting point.

See our page for painters and decorators under CIS.

4. Joiners (SIC 43320) -- 2,826 in 2025, TTM 3,207, +51.0%

The joinery segment posts the highest year-on-year growth rate of any trade: +51.0%, with a TTM of 3,207 against a prior-period comparison that implies a doubling of the run-rate. The 2025 annual figure of 2,826 is the settled count; the TTM to April 2026 of 3,207 confirms the acceleration has persisted. This is an unusual pattern. Joiners are often second-fix and fit-out trades on new-build sites where contractor chain structures are well established, which may be driving a wave of formal incorporation to meet contractor due-diligence and insurance requirements. Where a larger main contractor or developer requires a subcontractor to be a limited company, the choice is made for the subcontractor regardless of tax preference.

5. Flooring contractors (SIC 43330) -- 1,718 in 2025, TTM 1,771, -1.1%

Flooring had 1,011 new companies in 2016 and 1,718 in 2025, a 70% decade-long increase. The current TTM of 1,771 and a marginal -1.1% YoY change indicate a broadly stable level of incorporation activity rather than a strong directional shift. Flooring sits in a position where contract sizes are often smaller, sole trader is a natural and cost-effective structure, and the additional overhead of a limited company (accounts, Corporation Tax filing, payroll software, confirmation statements) requires a sufficient scale of turnover to be worth carrying. The relatively flat YoY suggests the trade is not yet experiencing the same structural pull towards incorporation as joiners or the installation trades.

6. Plasterers (SIC 43310) -- 1,489 in 2025, TTM 1,389, -12.8%

Plasterers grew from 851 incorporations in 2016 to a peak in the mid-decade period and are now contracting: a -12.8% YoY decline with a TTM of 1,389 tracking below the 2025 annual figure. Plastering is labour-intensive and tends to follow new-build starts; the current softness in new-build residential activity is a plausible explanation for falling incorporations. Plasterers who were incorporating during the 2020-2022 construction boom may be working through existing workloads; new entrants are incorporating at a lower rate as pipeline visibility shortens. It is also a trade where the materials-to-labour split means CIS deductions (on labour only) are proportionally higher than in materials-heavy trades, so the cashflow benefit of the EPS route remains real for those trading as companies.

7. Groundworks (SIC 43120) -- 742 in 2025, TTM 714, 0.0%

Groundworks is the most stable trade in the dataset: 742 incorporations in 2025 against a TTM of 714 and essentially no year-on-year change (0.0%). The 2016 base of 676 shows only a 10% decade-long increase, the smallest of any trade in this analysis. Groundworks is plant-heavy rather than labour-heavy, which affects CIS in a specific way: plant hire under CIS is treated differently from labour, and the deductible element of a groundworks invoice may be a smaller proportion of the total than in finishing trades, reducing the incentive that drives incorporation for labour-only trades. Groundworks businesses also tend to be larger at start-up due to plant costs, meaning the existing company base is already well-established.

8. Demolition (SIC 43110) -- 368 in 2025, TTM 360, -41.4%

Demolition shows the sharpest year-on-year decline by a considerable margin: -41.4%, with 368 incorporations in 2025 and a TTM of 360. The 2016 base of 244 means the decade-long level has still increased by 51%, but the current trend is steeply negative. Demolition is a specialist, capital-intensive, project-specific trade with a comparatively small total workforce and a register dominated by established companies. New incorporations tend to follow contract awards rather than a continuous pipeline, and a quieter project market flows through almost immediately into fewer start-ups. The -41.4% should be read against this context rather than as a sign of structural decline in the trade itself.

Why incorporation is rising: what the data is really picking up

Before connecting these numbers to the tax decision, it is worth being precise about what they measure and what they do not. Companies House incorporation data counts the creation of new legal entities under construction SIC codes. It does not measure how many of those entities remain active, how large they are, or whether they were created to trade under CIS or for another reason. A sole trader who incorporates adds one to the count, as does a new start-up that chooses a limited structure from day one.

Several forces are running simultaneously and are not mutually exclusive:

• Cashflow and CIS deductions. The real-time EPS offset available to a limited company converts year-end CIS refunds into monthly cash recovery. For a trade with heavy and predictable deductions, this is a quantifiable benefit that pulls towards incorporation regardless of the headline tax position.
• Contractor due-diligence requirements. Since April 2026, contractors must conduct three due-diligence steps before each payment under the GPS anti-fraud rules in Finance Act 2026. Many larger contractors are asking subcontractors to be limited companies as a practical way of meeting their verification and record-keeping obligations. This effect is visible most clearly in the joinery surge.
• Gross payment status via the per-director route. A two-director company qualifies for GPS on £30,000 of net CIS turnover per director, or £100,000 total. A sole trader qualifies on £30,000 total. Incorporation opens an additional route to GPS for multi-director businesses, and GPS removes CIS deductions entirely.
• Professionalisation and growth. As businesses grow past the income tax higher-rate threshold, the tax advantage of retaining profits inside a company becomes real. The decade-long rise in painters and plumbers suggests a maturing cohort of established subbies making a deliberate structural choice rather than a spontaneous rush.
• Making Tax Digital. From April 2026, sole traders and partnerships with gross income over £50,000 are in scope for MTD for Income Tax. The threshold is tested on gross CIS income before deductions, not the net amount banked, which means a subcontractor on £60,000 gross is in scope even if they receive only £48,000. Limited companies are outside MTD ITSA, which removes a quarterly-update burden that some subbies find onerous.

The full picture of why CIS businesses incorporate, the cashflow mechanics, GPS eligibility and the MTD position, is set out in our guide to CIS sole trader vs limited company.

The tax decision by profit level: what the data does not tell you

High incorporation rates in a trade tell you what other subcontractors are choosing, not what is optimal for your own circumstances. The limited-vs-sole-trader tax decision turns on three variables that are individual, not trade-specific: your profit level, how much of that profit you need to draw out each year, and how heavily you are deducted under CIS.

The 2026/27 tax comparison

On a taxable profit of £55,000 for 2026/27 (after allowable expenses but before the structure choice), a sole trader pays income tax and Class 4 National Insurance as follows:

• Income tax: 20% on the £37,700 band between the personal allowance (£12,570) and the basic rate limit (£50,270) is £7,540; 40% on £4,730 above £50,270 is £1,892. Income tax: £9,432.
• Class 4 National Insurance: 6% on the £37,700 band is £2,262; 2% on the £4,730 above the upper limit is £95. Class 4 NIC: £2,357.
• Total: approximately £11,789. Net retained: approximately £43,211.

A limited company at the same profit, drawing a £12,570 salary and the balance as dividends, faces:

• Employer National Insurance: 15% on £7,570 (salary above the £5,000 secondary threshold) is approximately £1,136.
• Corporation Tax: 19% on the £41,294 profit remaining after deductible salary and employer NIC is approximately £7,846.
• Dividend tax: approximately £3,542 at the 2026/27 ordinary dividend rate of 10.75% on the dividends above the £500 allowance (the FA 2026 rate, in force from 6 April 2026).^[2]
• Total: approximately £12,524. Net retained by the director: approximately £42,477.

At this profit level, extracting everything, the limited company costs roughly £735 more. The company advantage is not in the headline rate at modest profits where all of it is drawn out. It emerges in two situations: where you can leave profit inside the company (deferring dividend tax to a later, potentially lower-rate year), and where profits comfortably exceed the higher-rate threshold so that the 19% corporation tax rate compares favourably against 40% income tax on the excess. The dividend rates under FA 2026 (10.75%, 35.75%, 39.35%) are higher than they were in earlier years, which has narrowed the company advantage at every income level. Any comparison using the pre-2026 rates of 8.75% or 33.75% overstates the company case.

The CIS cashflow factor: trade-neutral but trade-relevant

The tax comparison above ignores timing, which is where many subbies find the company route wins on grounds other than end-year tax. A limited company offsets the CIS deducted from its payments against the PAYE and CIS it owes HMRC each month via the Employer Payment Summary (EPS). Where CIS deducted exceeds monthly PAYE due, the surplus carries forward and is eventually refunded. A sole trader waits for Self Assessment, which means carrying a cashflow shortfall for several months to the best part of a year.

For a trade like electrical installation, where 20% is taken on the full labour element of every payment and the payments are frequent and substantial, the difference is not academic. On £7,000 per month in net labour payments, a sole trader carries a £1,400 per month deduction for up to 12 months before the Self Assessment refund arrives. That is a compounding cashflow cost that a limited company eliminates by offsetting in real time. The EPS mechanics are covered in detail in our guide to how CIS limited companies reclaim deductions.

What this means per trade

• Electricians and plumbers: High-volume, high-deduction trades. The cashflow benefit of the EPS offset is material. For those above the higher-rate threshold or with multiple directors, the tax and GPS routes both point towards incorporation. For those under £50,000 taxable profit fully extracted, the tax saving is small or negative; the cashflow benefit may still decide it.
• Painters and decorators: Typically lower average contract values. The decade-long rise in incorporations suggests a maturing trade rather than a speculative boom. Incorporation makes sense at higher profits; at modest profits the admin cost and the current dividend rates mean the sole trader position is often cheaper.
• Joiners: The current +51% growth rate includes a substantial element of contractor-driven incorporation requirements. A joiner who incorporates to meet a contractor's requirements should still model the tax position; the structure is not wrong, but the decision is not purely a tax one.
• Flooring and plasterers: Relatively flat or declining YoY. Modest-profit sole trading remains common and is often correct. If CIS deductions are heavy and cashflow is tight, the EPS route adds genuine value regardless of the tax arithmetic.
• Groundworks: Plant-heavy and project-specific. The 10% decade-long growth reflects a trade where the sole-trader and partnership structures have historically served well and the labour-dominant drivers of incorporation are less pronounced.
• Demolition: Project-specific, capital-intensive, and currently contracting on new incorporations. The existing company base is well-established. Sole trader is a workable structure; incorporation decisions tend to be driven by contract-specific requirements rather than a general efficiency case.

Gross payment status: the one factor that changes everything

For any trade, if you can qualify for gross payment status (GPS), the CIS deduction falls to zero and the cashflow question disappears. The turnover test for a limited company is measured per director (£30,000 net CIS turnover each) or £100,000 in total, compared with £30,000 for a sole trader. A two-director company can reach the per-director threshold at £60,000 aggregate net turnover, which a single sole trader achieves at £30,000. For a multi-director firm, incorporation opens a route to GPS that has nothing to do with the headline tax rate.

From 6 April 2026 the rules on keeping GPS tightened substantially. Finance Act 2004 sections 62A and 62B (as amended by Finance Act 2026) introduced knowledge-based penalties (20% of the payment under s.62A; 100% of the sum a false return treats as paid under s.62B), and HMRC can revoke GPS immediately where a contractor "knew or should have known" about fraudulent connections in its supply chain. GPS no longer runs on autopilot. Our gross payment status guide covers the full qualifying and maintenance picture under the 2026 rules, and our GPS service handles the application and the ongoing due diligence.

The right question to ask

The incorporation data tells you which trades are moving. It does not tell you whether to move. The right questions for a subcontractor deciding on structure are:

• What is my taxable profit, and how much of it do I draw out each year? Below about £55,000 fully extracted, a sole trader is usually cheaper or equal after 2026/27 rates. Above it, and retaining some profit, the company starts to win.
• How heavily am I deducted, and does carrying the CIS shortfall through the year cause genuine cashflow problems? If so, the EPS offset may be worth more than any headline tax comparison.
• Is gross payment status available or achievable? If so, it removes the deduction entirely and the structure choice becomes mainly about tax and admin rather than cashflow.
• Am I being asked by my main contractor to trade as a limited company? If yes, model the tax position before deciding rather than assuming the contractor requirement makes it optimal.
• Is my gross income above £50,000 and does the MTD ITSA quarterly burden matter to me? A limited company removes it but adds company filing instead.

To put your own numbers into the comparison, our CIS take-home calculator runs both structures side by side at 2026/27 rates. Our construction accounting services model the full picture, including CIS deduction rates, GPS eligibility, MTD position and actual drawings, before recommending a structure.

Sources

1. UK Construction Index, Trade Tax Specialists. Data sourced from the Companies House Advanced Search API under the Open Government Licence v3.0. Compiled and published at tradetaxspecialists.co.uk/research/uk-construction-index. Annual figures are gross incorporations per calendar year. TTM and YoY figures are based on the trailing 12 months to April 2026 (last settled month). The most recent two months (May-June 2026) are provisional and excluded from YoY comparisons. Dissolved companies remain on the register; the data measures gross registration flow, not net active businesses. Free to cite with attribution to Trade Tax Specialists. Companies House data: Open Government Licence v3.0 (nationalarchives.gov.uk/doc/open-government-licence/version/3/).
2. Finance Act 2026, section 4, in force 6 April 2026. Dividend tax rates for 2026/27: 10.75% ordinary rate, 35.75% upper rate, 39.35% additional rate. Published by HMRC at gov.uk/tax-on-dividends.