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Accounting and Financial Management - UK - January 2015

“Growth in the UK accounting and financial management market has been restricted by the sluggish economy in recent years. However the market has started to show stronger growth in 2014 in line with the more robust economic recovery. Consultancy is expected to remain the strongest growth sector, as accountancy firms continue to strengthen their consultancy capabilities in a bid to reduce their dependence on more mature accountancy functions and to become truly multi-disciplinary professional services businesses.”
– Claudia Preedy - Industrial Analyst

This report addresses the following key questions concerning the UK accounting and financial management market:

  • How has the UK accounting and financial management market performed over the last five years?
  • What has been the development of the individual sectors of the market?
  • What are the major trends and issues affecting the market?
  • How have key players performed in recent years?
  • How is the market expected to develop over the next five years?

Despite the more positive economic climate in 2014, a cloud of uncertainty has shifted over the UK’s economic outlook in recent months. A potential slowdown in UK economic growth would have a direct knock-on effect on demand for accountancy and financial management services so the outlook for the market carries a degree of uncertainty. Nonetheless, with economic growth expected to be sustained, the trading conditions for the accounting and financial management market are anticipated to remain positive for the foreseeable future.

Consultancy and advisory services are set to continue to represent the strongest growth potential for accountancy firms. Cost cutting and efficiency savings have played a big part in the need for consulting advice in recent years, and are expected to continue to do so. Over the coming years, strong growth in digital technology is also set to be a key driver of the consultancy services sector.

Technology and its application will also continue to be a driving force of change in the accountancy sector, with firms increasingly adopting new technologies to become more efficient, flexible and responsive to clients’ needs. The key focus is on technologies that make accountants more productive and bring them closer to clients - with these technologies predominately cloud and mobile based.

 

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Table of contents

  1. Executive Summary

      • The market
        • UK market for accounting and financial management up by an estimated 5% in 2014
          • Figure 1: Segmentation of the UK market for accounting & financial management, by type of service, 2010-14
        • Growth in the audit & accounting sector has been hampered by the sluggish economy in recent years
          • The tax services sector started to recover in 2012 and has demonstrated growth since
            • Consultancy is now the strongest growth sector of the accounting & financial management market
              • Income from corporate finance and business recovery services accounts for around 12% of the total market
                • Figure 2: Forecast UK market for accounting & financial management, 2014-19
              • The UK market for accounting and financial management is expected to increase in real terms in each year to 2019, developing ahead of anticipated GDP growth
                • Consultancy is expected to continue to gain share of the overall accounting and financial management market
                  • Audit & accounting and tax services are relatively mature sectors and their share is likely to moderately decline over the next five years
                    • Demand for corporate finance and business recovery is expected to develop in line with the overall market
                      • Figure 3: Forecast segmentation of the UK market for accounting & financial management, by type of service, 2014 and 2019
                    • Market factors
                      • New UK and EU regulatory framework for audit market
                        • Rise in audit threshold shrinks market for auditing small company accounts
                          • Government clampdown on tax avoidance schemes
                            • Rise in private sector businesses and self-employment provide opportunities for accountants
                              • Figure 4: Number of private sector businesses in the UK, 2001-14
                            • Companies
                              • What we think
                              • Introduction

                                  • Definitions
                                    • Methodology
                                      • Abbreviations
                                        • Market positioning
                                        • UK Economy

                                          • Overview
                                            • Figure 5: UK GDP quarterly development, 2003-14
                                            • Figure 6: UK GDP in economic downturns and recoveries since 1979
                                          • Inflation
                                            • Interest rates
                                              • House prices
                                                • Consumer spending
                                                  • Manufacturing
                                                    • Business investment
                                                      • Imports
                                                        • Exports
                                                        • Market Factors

                                                          • Key points
                                                            • Legislation and government policy
                                                              • CMA audit order and new EU regulatory framework on statutory audit
                                                                • New audit threshold
                                                                  • EU Accounting Directive 2013/34/EU to have significant impact on small company financial reporting
                                                                    • New UK accounting standards
                                                                      • Taxation of LLPs
                                                                        • Government clampdown on tax avoidance schemes
                                                                          • Break-up of Audit Commission and tendering of contracts to private sector
                                                                            • Companies Act shake-up
                                                                              • Scottish tax devolution
                                                                                • Other market factors
                                                                                  • Rise in the number of active businesses as the UK is on road to economic recovery
                                                                                    • Figure 7: Number of private sector businesses in the UK, 2001-14
                                                                                    • Figure 8: Number of private sector businesses in the UK, 2001-14
                                                                                    • Figure 9: Number of VAT and/or PAYE registered enterprises in the UK, by industry group and turnover size band, 2014
                                                                                  • Self-employment higher than at any point over past 40 years
                                                                                    • Figure 10: Self-employed workers in the UK, 2003-14
                                                                                  • Trend in insolvencies and business recovery
                                                                                    • Figure 11: Number of company insolvencies, receiverships and administrations in England & Wales, 2004-13
                                                                                  • Trends in M&A activity
                                                                                    • Figure 12: Mergers and acquisitions involving UK companies, 2004-13
                                                                                  • Number of listed companies on a downward trend
                                                                                    • Figure 13: Number of main market and AIM listed companies, 2007-14
                                                                                    • Figure 14: Number of main market and AIM listed companies, 2007-14
                                                                                • Market Size & Segmentation

                                                                                  • Key points
                                                                                    • Overview
                                                                                      • Figure 15: The UK market for accounting & financial management, 2010-14
                                                                                      • Figure 16: The UK market for accounting & financial management, 2010-14
                                                                                    • Market segmentation
                                                                                      • Overview
                                                                                        • PwC is top FTSE100 auditor
                                                                                            • Figure 17: Segmentation of the UK market for accounting & financial management, by type of service, 201014
                                                                                            • Figure 18: Segmentation of the UK market for accounting & financial management, by type of service, 2010 and 2014
                                                                                          • Audit & accounting
                                                                                              • Figure 19: UK fee income from audit & accounting services, 2010-14
                                                                                            • Tax services
                                                                                                • Figure 20: UK fee income from tax services, 2010-14
                                                                                              • Consultancy
                                                                                                • Figure 21: UK fee income from consultancy services, 2010-14
                                                                                                • Figure 22: UK fee income from consultancy services, 2010-14
                                                                                              • Corporate finance & business recovery
                                                                                                • Figure 23: UK fee income from corporate finance & business recovery services, 2010-14
                                                                                              • Overseas trade in accountancy services
                                                                                                  • Figure 24: International trade in accountancy services, 2009-13
                                                                                                  • Figure 25: Exports and imports of accountancy services, 2009-13
                                                                                              • Market Trends & Issues

                                                                                                • Key points
                                                                                                  • Market trends & issues
                                                                                                    • Dominance of the Big Four in audit market unlikely to subside any time soon
                                                                                                      • Rise in audit threshold threatening revenue of smaller accountancy firms
                                                                                                        • Growth in consultancy and breadth of advisory services offered
                                                                                                          • Accountancy firms increasingly adopting cloud and mobile technologies
                                                                                                            • Rising demand for ‘big data’ and digital analytics tools
                                                                                                              • Role of content marketing and social media
                                                                                                                • Forensic accounting sector on the rise
                                                                                                                • Industry Structure

                                                                                                                  • Key points
                                                                                                                    • Industry development
                                                                                                                      • Figure 26: Top 20 accountancy firms in the UK, by fee income, 2014
                                                                                                                    • Accountancy firms move into legal services
                                                                                                                      • Mid-tier firms are on consolidation course
                                                                                                                        • Figure 27: Analysis of the changes in the structure of the UK accounting, bookkeeping, auditing and tax consultancy industry, 2010-14
                                                                                                                      • Structure by employment
                                                                                                                        • Figure 28: Analysis of the employment structure of the accounting, bookkeeping, auditing and tax consultancy industry, 2013 and 2014
                                                                                                                      • Structure by turnover
                                                                                                                        • Figure 29: Analysis of the financial structure of the UK accounting, bookkeeping, auditing and tax consultancy industry, 2013 and 2014
                                                                                                                        • Figure 30: Analysis of the financial structure of the UK accounting, bookkeeping, auditing and tax consultancy industry, 2014
                                                                                                                    • Company Profiles

                                                                                                                      • Baker Tilly UK Holdings LTD

                                                                                                                            • Figure 31: Segmental turnover analysis of Baker Tilly UK Holdings, 2014
                                                                                                                            • Figure 32: Financial Analysis of Baker Tilly UK Holdings, 2010-14
                                                                                                                        • Bdo Llp

                                                                                                                              • Figure 33: Financial Analysis of BDO, 2010-14
                                                                                                                          • Deloitte LLP

                                                                                                                                • Figure 34: Segmental turnover analysis of Deloitte, 2014
                                                                                                                                • Figure 35: Financial Analysis of Deloitte, 2010-14
                                                                                                                            • Ernst & Young LLP

                                                                                                                                  • Figure 36: Segmental turnover analysis of EY, 2014
                                                                                                                                  • Figure 37: Financial Analysis of Ernst & Young, 2010-14
                                                                                                                              • Grant Thornton UK LLP

                                                                                                                                    • Figure 38: Segmental turnover analysis of Grant Thornton, 2014
                                                                                                                                    • Figure 39: Financial Analysis of Grant Thornton UK, 2010-14
                                                                                                                                • Kpmg Llp

                                                                                                                                      • Figure 40: Segmental turnover analysis of KPMG, 2013
                                                                                                                                      • Figure 41: Financial Analysis of KPMG, 2009-13
                                                                                                                                  • Mazars LLP

                                                                                                                                        • Figure 42: Segmental turnover analysis of Mazars, 2013
                                                                                                                                        • Figure 43: Financial Analysis of Mazars, 2009-13
                                                                                                                                    • Moore Stephens LLP

                                                                                                                                          • Figure 44: Segmental turnover analysis of Moore Stephens, 2013
                                                                                                                                          • Figure 45: Financial Analysis of Moore Stephens, 2009-13
                                                                                                                                      • PriceWaterhouseCoopers LLP

                                                                                                                                            • Figure 46: Segmental turnover analysis of PwC, 2014
                                                                                                                                            • Figure 47: Financial Analysis of PwC, 2010-14
                                                                                                                                        • Smith and Williamson Holdings LTD

                                                                                                                                              • Figure 48: Financial Analysis of Smith & Williamson Holdings, 2010-14
                                                                                                                                          • Market Forecast

                                                                                                                                            • Key points
                                                                                                                                              • Market prospects
                                                                                                                                                • Market growth to be sustained over the next five years
                                                                                                                                                  • Accountancy firms to remain on acquisition trail
                                                                                                                                                    • Figure 49: Forecast UK market for accounting & financial management, 2015-19
                                                                                                                                                    • Figure 50: Forecast UK market segmentation for accountancy & financial management, by type of service, 2015-19
                                                                                                                                                  • Audit and accounting
                                                                                                                                                    • Tax services
                                                                                                                                                      • Consultancy
                                                                                                                                                        • Corporate finance and business recovery
                                                                                                                                                          • Figure 51: Forecast UK market segmentation for accounting & financial management, by type of service, 2015-19
                                                                                                                                                      • Further Sources & Contacts

                                                                                                                                                        • Trade and professional associations
                                                                                                                                                          • Trade exhibitions
                                                                                                                                                            • Trade magazines

                                                                                                                                                            Companies Covered

                                                                                                                                                            To learn more about the companies covered in this report please contact us.

                                                                                                                                                            Accounting and Financial Management - UK - January 2015

                                                                                                                                                            £995.00 (Excl.Tax)