The consolidation of the accountancy sector in the UK appears to have accelerated, with figures detailing a 4% drop in the number of accountancy firms in 2013.
Peter Alderson, advised that, “Having slowed since the peak of the financial crisis, the decline in the number of accountancy firms appears to be picking up speed again, with 277 fewer practices now than a year ago.”
“One key reason may be the impact of new rules loosening the requirements for businesses to carry out an audit is starting to filter through, adding to the financial pressures that many, particularly smaller, firms were already feeling. Audit is a core revenue stream for many accountancy businesses, so any drop-off in this type of work is going to have a significant impact on profitability.”
Research indicates that since October 2012, increasing numbers of businesses have been able to choose whether or not to be audited, as the threshold at which companies are exempt from having to have an audit carried out was relaxed.
It would appear that accountancy firms with between two and six principals have seen the biggest decline, with a total of 2,997 registered firms in 2013 compared to 3,264 in 2012. However, the number of firms with 7-10 principals has actually increased to 202, up from 191 the previous year.
Tax planning work, which has been a highly profitable way to add value by helping clients reduce their tax bills, is also under pressure as HMRC clamps down on the number of tax schemes it allows.
LDF offers a number of finance solutions to help give firms the financial cushion they need to cover the costs of tax and VAT bills, professional indemnity insurance, unpaid bills, acquisitions or investment such as equipment purchases or refurbishment.
