On the one hand, demand for accounting services is increasing significantly. On the other, the number of accountancy firms operating in the UK is declining.
According to recent industry analysis*, the UK has lost almost 3,750 accountancy firms since 2019, representing an 8.6% reduction in the number of practices serving businesses and individuals across the country. At the same time, Making Tax Digital for Income Tax is bringing millions of sole traders and landlords into a more frequent cycle of digital tax reporting, many of whom have never previously engaged an accountant.
These trends are not moving in the same direction. They are creating a widening gap between the demand for professional advice and the capacity available to deliver it.
I’m James Mattam, Group Director of Franchising at TaxAssist Accountants, and I’ve spent more than 20 years working with accountants and practice owners across the UK. During that time, I’ve seen first-hand how the profession has evolved and the challenges and opportunities facing those looking to build and grow an accountancy practice. I believe this widening gap presents both a challenge for the profession and a significant opportunity for ambitious accountants.
The profession is changing
The decline in the number of accountancy firms is not necessarily a sign of a profession in difficulty.
In many cases, it reflects long-standing trends. Practice owners are reaching retirement age. Consolidation within the sector continues. Recruitment remains challenging. Regulation is increasing. Technology is reshaping workflows and client expectations.
Running a modern accountancy practice is substantially more complex than it was even a decade ago.
Today's accountant is expected to provide technical expertise, regulatory compliance, technology implementation, business advisory services, marketing leadership and team management, often all at the same time.
For sole practitioners and smaller firms, the burden can be considerable.
Clients need more than compliance
At the same time, clients are demanding more from their accountants than ever before.
The introduction of Making Tax Digital is accelerating the move towards regular engagement between accountants and clients. Businesses and individuals increasingly expect proactive support, real-time information and strategic guidance rather than an annual compliance service.
Many small business owners now view their accountant as their most trusted adviser.
This shift creates a tremendous opportunity for firms that have the systems, expertise and capacity to meet evolving client needs. However, it also raises an important question.
If demand is increasing while the number of firms is decreasing, who will serve the next generation of clients?
Why the franchise model is so attractive
This is one reason why we continue to see strong interest in our franchise model.
Traditionally, many accountants have viewed practice ownership as a choice between employment and complete independence, but there is a third option - franchising.
Accountants want the freedom of owning their own business, but they also recognise the value of established systems, proven processes, marketing expertise, compliance support and access to specialist knowledge.
The reality is that many of the challenges facing independent firms today are difficult to tackle alone.
Whether it's responding to regulatory change, embracing new technology, generating leads, recruiting team members or expanding service offerings, business owners often benefit from being part of something larger than themselves.
At TaxAssist Accountants, we receive interest from both accountants starting their first practice and existing practitioners looking to accelerate growth through practice conversion.
Both groups recognise that the future of the profession increasingly favours firms that can combine local relationships with the resources, infrastructure and expertise needed to operate at scale.
The opportunity ahead
Despite concerns about the shrinking number of firms, I remain extremely optimistic about the future of the profession. The demand for high-quality accountancy services is not disappearing. If anything, it is growing.
The UK's small business community continues to need support navigating tax, technology, regulation and financial decision-making. Making Tax Digital is likely to strengthen the relationship between accountants and clients rather than weaken it.
The question is not whether demand exists. The question is who is best positioned to meet it.
For accountants considering practice ownership, for existing practitioners evaluating their next stage of growth, and for those looking to invest in an established accountancy business, the current market presents a compelling opportunity.
At TaxAssist Accountants, we believe the most successful firms of the future will combine professional expertise with strong technology, robust support systems, specialist resources and trusted local relationships.
The accountants who embrace that model will be well placed to thrive.
Because while the number of firms may be falling, the need for trusted advice has never been greater.
