Table of Contents
Executive Summary
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- The market
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- Figure 1: Segmentation of the UK market for accounting & financial management, by type of service, 2012-16
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- Figure 2: Forecast UK market for accounting & financial management, 2017-21
- Figure 3: Forecast segmentation of the UK market for accounting & financial management, by type of service, 2017 and 2021
- Market factors
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- Figure 4: Number of private sector businesses in the UK, 2002-16
- Companies
- What we think
Key Insights
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- What are the implications of Brexit on the UK accountancy sector?
- What are the likely implications of HMRC’s plans for “Making Tax Digital” for accountants?
- How are the recently introduced audit reforms affecting mid-tier accounting firms?
- How can big data analytics help drive growth for accountants?
Introduction
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- Definitions
- Methodology
- Abbreviations
- Market positioning
- UK economy
- Overview
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- Figure 5: UK GDP quarterly development, 2003-16
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- Figure 6: UK GDP in economic downturns and recoveries since 1979
- Inflation
- Interest rates
- House prices
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- Figure 7: UK House price changes, 2004-2016
- Consumer spending
- Manufacturing
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- Figure 8: UK manufacturing, 2014-16
- Business investment
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- Figure 9: UK GFCF 2003-16
- Imports
- Exports
Market Factors
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- Key points
- Legislation and government policy
- CMA audit order and new EU regulatory framework on statutory audit
- Impact of Brexit on EU audit reform
- New audit threshold
- New UK accounting standards
- Large accounting firms under spotlight in clampdown on tax avoidance schemes
- Measures put in place to crack down on tax avoidance
- Finance Bill 2017
- Companies Act shake-up
- Scottish tax devolution
- HMRC move towards digital tax services
- Other market factors
- Rise in number of active businesses as UK economic recovery becomes more robust
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- Figure 10: Number of private sector businesses in the UK, 2002-16
- Figure 11: Number of private sector businesses in the UK, 2002-16
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- Figure 12: Number of VAT and/or PAYE registered enterprises in the UK, by industry group and turnover size band, 2016
- Self-employment higher than at any point over the past 40 years
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- Figure 13: Self-employed workers in the UK, 2005-16
- Trends in insolvencies and business recovery
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- Figure 14: Number of company insolvencies, receiverships and administrations in England & Wales, 2006-16
- Corporate credit conditions
- UK M&A market remains resilient in 2016, with a weaker sterling attracting foreign investment
- Brexit-induced uncertainty to potentially result in slump in M&A activity
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- Figure 15: Mergers and acquisitions involving UK companies, 2004-16
- Number of listed companies on a downward trend
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- Figure 16: Number of main market and AIM listed companies, 2009-16
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- Figure 17: Number of main market and AIM listed companies, 2009-16
Market Size and Segmentation
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- Key points
- Overview
- Consultancy sector shows strongest growth as accountancy firms expand their service offering
- Accountancy firms adopt new business models to diversify or specialise
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- Figure 18: The UK market for accounting & financial management, 2012-16
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- Figure 19: The UK market for accounting & financial management, 2011-15
- Market segmentation
- Overview
- KPMG is top listed company auditor, PwC is top FTSE 100 auditor
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- Figure 20: Segmentation of the UK market for accounting & financial management, by type of service, 2012-16
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- Figure 21: Segmentation of the UK market for accounting & financial management, by type of service, 2012 and 2016
- Audit & accounting
- Rise in audit threshold putting pressure on lower end of auditing market
- Audit fees at lower end of the market remain squeezed but fees are more stable at the top end
- Innovative technology solutions enable auditors to deliver continually higher audit quality and deeper insight
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- Figure 22: UK fee income from audit & accounting services, 2012-16
- Tax services
- Demand for tax advisory services remains high
- Implications of Making Tax Digital for accountants
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- Figure 23: UK fee income from tax services, 2012-16
- Consultancy
- Accounting firms face increased competition in consultancy services sector
- Brexit-induced uncertainty sees boom in demand for consultancy services
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- Figure 24: UK fee income from consultancy services, 2012-16
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- Figure 25: UK fee income from consultancy services, 2012-16
- Corporate Finance & Business Recovery
- Insolvency practitioners struggle with a more robust economic recovery
- Brexit could challenge UK’s leading position in cross-border restructuring
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- Figure 26: UK fee income from corporate finance & business recovery services, 2012-16
- Overseas trade in accountancy services
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- Figure 27: International trade in accountancy services, 2011-15
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- Figure 28: Exports and imports of accountancy services, 2011-15
Market Trends & Issues
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- Key points
- FTSE 250 audit market to remain preserve of the big four for the foreseeable future
- Lower end of the audit market is becoming increasingly uneconomical for auditors
- Accounting firms on acquisition trail to beef up consultancy arms
- Increased demand for cyber security advisory services
- Regulatory and risk consultancy services show strong demand growth
- Buoyant M&A activity as accountancy firms look to rapidly expand consultancy capabilities
- Big four tap into start-up and SME market
- Cloud computing is transforming the accounting industry
- ‘Big Data’ and data analytics represent key growth areas for accountants
- Role of content marketing and social media
- Forensic accounting
Industry Structure
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- Key points
- Industry development
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- Figure 29: Top 20 accounting firms in the UK, by fee income, 2016
- Accounting firms are moving into legal services
- Mid-tier firms are also on consolidation course
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- Figure 30: Analysis of the changes in the structure of the UK accounting, bookkeeping, auditing and tax consultancy industry, 2012-16
- Structure by employment
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- Figure 31: Analysis of the employment structure of the accounting, bookkeeping, auditing and tax consultancy industry, 2015 and 2016
- Structure by turnover
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- Figure 32: Analysis of the financial structure of the UK accounting, bookkeeping, auditing and tax consultancy industry, 2015 and 2016
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- Figure 33: Analysis of the financial structure of the UK accounting, bookkeeping, auditing and tax consultancy industry, 2016
Company Profiles
RSM UK Holdings Ltd (Formerly Baker Tilly UK Holdings LTD)
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- Figure 34: Segmental turnover analysis of RSM UK Holdings, 2016
- Figure 35: Financial analysis of RSM UK Holdings, 2012-16
- Company strategy
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BDO LLP
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- Figure 36: Financial analysis of BDO, 2012-16
- Company strategy
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Deloitte LLP
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- Figure 37: Segmental turnover analysis of Deloitte, 2015
- Figure 38: Financial analysis of Deloitte, 2011-15
- Company strategy
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Ernst & Young LLP
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- Figure 39: Segmental turnover analysis of EY, 2016
- Figure 40: Financial analysis of Ernst & Young, 2012-16
- Company review and strategy
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Grant Thornton UK LLP
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- Figure 41: Segmental turnover analysis of Grant Thornton, 2016
- Figure 42: Financial analysis of Grant Thornton UK, 2012-16
- Company strategy
- Company outlook
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KPMG LLP
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- Figure 43: Segmental revenue analysis of KPMG, 2016
- Figure 44: Financial analysis of KPMG, 2012-16
- Company outlook
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Mazars LLP
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- Figure 45: Segmental turnover analysis of Mazars, 2015
- Figure 46: Financial analysis of Mazars, 2011-15
- Company strategy & outlook
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Moore Stephens LLP
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- Figure 47: Segmental turnover analysis of Moore Stephens, 2016
- Figure 48: Financial analysis of Moore Stephens, 2012-16
- Company strategy
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PricewaterhouseCoopers LLP
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- Figure 49: Segmental turnover analysis of PwC, 2016
- Figure 50: Financial analysis of PwC, 2012-16
- Company review & strategy
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Smith and Williamson Holdings Ltd
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- Figure 51: Financial analysis of Smith & Williamson Holdings, 2012-16
- Company outlook & strategy
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Market Forecast
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- Key points
- Market prospects
- UK economic outlook remains positive but Brexit-related challenges ahead
- Acquisitions, partnerships and alliances to continue to revolve around the technology space
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- Figure 52: Forecast UK market for accounting & financial management, 2017-21
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- Figure 53: Forecast UK market segmentation for accountancy & financial management, by type of service, 2017-21
- Audit and accounting
- Tax services
- Consultancy
- Corporate finance and business recovery
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- Figure 54: Forecast UK market segmentation for accounting & financial management, by type of service, 2017-21
Further Sources & Contacts
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- Trade associations
- Association of Chartered Certified Accountants (ACCA UK)
- Chartered Institute of Management Accountants (CIMA UK)
- Chartered Institute of Public Finance Accountancy (CIPFA)
- Institute of Chartered Accountants in England and Wales (ICAEW)
- Institute of Chartered Accountants Scotland (ICAS)
- Trade exhibitions
- Accountex 2017
- CIPFA annual conference 2017
- Trade magazines
- Accountancy Age
- Accountancy Live
- Tax Advisor
- Taxation
- The Accountant
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