2022
9
UK Accounting and Financial Management Market Report 2022
2022-03-10T03:04:22+00:00
OX1100319
1495
148735
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Report
en_GB
“Advisory services will be an important area for market growth over the coming years. The digital transformation of business, accelerated by the COVID-19 crisis, is set to remain a key…

UK Accounting and Financial Management Market Report 2022

£ 1,495 (Excl.Tax)

Report Summary

The UK Accounting and Financial Management market research report identifies consumer attitudes towards regulatory changes in the market, key industry players, and the post-pandemic environment in the UK. This market report covers the market size, market forecast, market segmentation and industry trends for the Accounting and Financial Management market in the UK.

Current Market Landscape

As the economy started to settle, the start of the post-Brexit era and with the roll-out of the vaccine programme firms saw increased demand for their services in 2021.

  • The UK market for accounting and financial management increased by an estimated 6% to £27.5 billion, almost fully offsetting the COVID-19 related 7% decline recorded in 2020.
  • UK fee income from consultancy services declined by an estimated 8% in 2020.
  • The Big Four accounted for a combined 81% of the total top 20 fee income.

The development of the UK accounting and financial management market is set to be supported by sustained UK economic growth. Nonetheless, the UK economy is facing headwinds in 2022 which could impact market growth in the short term. The inflation rate is of particular concern and is likely to suppress consumer spending, a key driver of UK economic growth. Moreover, many industries continue to be affected by disruptions to global supply chains, high energy and material costs. These factors could suppress business and investment activity, affecting demand for accountancy services.

Future Market Trends in Accounting and Financial Management

The increased use of software and technology has commoditised some traditional tax and accounting functions. Therefore, margins from some tax services are becoming increasingly squeezed, especially at the bottom end of the market.

The digital transformation of business, accelerated by the COVID-19 crisis, is set to remain a key driver of the consultancy services sector. Data analytics, cybersecurity, risk consultancy, supply chain expertise and ESG advice are also playing an increasingly important role in consultancy. Major accountancy firms will continue to invest in these high growth areas to boost their capabilities and credentials. This will include increased spending on training and upskilling employees, targeted partner hires or acquisitions of sector specialist consultancies.

Read on to discover more details or take a look at all of our UK Financial Services market research.

Quickly understand

  • The impact of COVID-19 and how the market will adapt to the post-pandemic environment
  • The impact of legislative and regulatory changes on the market
  • How competitors are adapting their business models to evolving client requirements
  • The performance of key industry players
  • Five-year market outlook

Covered in this report

Brands: Deloitte, BDO, Ernst & Young (EY), Grant Thornton UK, Azets, Pricewaterhouse Coopers (PwC), KPMG, Tilney Smith & Williamson, RSM, Mazars, PKF UKI, MHA, Moore UK, Crowe UK, Saffery Champness, Haines Watts, Begbies Traynor Group, Xeinadin Group, FRP Advisory, UHY Hacker Young.

Expert analysis from a specialist in the field

This report, written by Utku Tansel, a leading analyst in the Retail sector, delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

Advisory services will be an important area for market growth over the coming years. The digital transformation of business, accelerated by the COVID-19 crisis, is set to remain a key driver of the consultancy services sector. Data analytics, strategy, cybersecurity, risk consultancy, supply chain expertise and ESG advice are also playing an increasingly important role in advisory services. Major accountancy firms will continue to invest in these high growth areas to boost their capabilities and credentials. This will include investment in training and upskilling employees, new targeted partner hires or acquisitions of sector specialist consultancies.

Utku Tansel - European Retail AnalystClaudia Preedy
Senior B2B Analyst

Table of Contents

  1. Overview

    • Key issues covered in this Report
    • COVID-19: market context
    • Economic and other assumptions
    • Covered in this Report
  2. Executive Summary

    • The five-year outlook for UK accounting and financial management
      • Figure 1: Category outlook, 2022-26
    • The market
    • Market rebounds in 2021
      • Figure 2: UK market for accounting & financial management, 2017-21
    • COVID-19 disrupted consultancy sector in 2020, but also offers new opportunities for advisory services
    • Demand for audit and accounting services is up by an estimated 6% in 2021
    • Strong demand for compliance advice supports tax services sector
    • Corporate finance & business recovery services sector rebounds in 2021
      • Figure 3: Segmentation of the UK market for accounting & financial management, by type of service, 2021 (£ million and %)
    • Corporate finance, business recovery and advisory services to drive market growth in 2022
      • Figure 4: Forecast UK market segmentation for accounting & financial management, by type of service, 2022-26
    • Companies and brands
    • Big Four account for some 80% of top 20 firms’ UK fee income
      • Figure 5: Top 10 accounting firms in the UK, by fee income, 2020 (% of top 10 fee income)
  3. Issues and Insights

    • ESG offers growth opportunities for accountants
    • Forthcoming reforms will further shake up audit sector
    • Investment in technology will help improve audit quality
  4. Market Size and Performance

    • UK market for accounting and financial management returns to growth in 2021
      • Figure 6: The UK market for accounting & financial management, 2017-21
      • Figure 7: The UK market for accounting & financial management, 2017-21
    • Accountants expand, diversify or specialise
  5. Market Segmentation

    • Consultancy services account for more than a third of the UK accounting and financial management market
      • Figure 8: Segmentation of the UK market for accounting & financial management, by type of service, 2017-21
      • Figure 9: Segmentation of the UK market for accounting & financial management, by type of service, 2021 (% of total)
    • Audit & accounting
    • Big Four still dominate large company audit market
    • Upcoming reforms will further shake up audit sector
    • Mid-tier firms grasp opportunities to compete for non-audit work for FTSE companies
    • Investment in technology will help improve audit quality
    • Firms adopt more agile ways of working and new technologies during the pandemic
    • Audit and accounting services sector up by an estimated 6% in 2021
      • Figure 10: UK fee income from audit & accounting services, 2017-21
    • Tax services
    • Regulatory changes, incentive schemes and tighter tax rules stimulate demand for tax advice and compliance services
    • Implications of Making Tax Digital for accountants
    • Tax services sector increased by an estimated 4% in 2021
      • Figure 11: UK fee income from tax services, 2017-21
    • Consultancy
    • Advisory services become key to business growth for accountancy firms
    • New UK-EU trading relationship fuels demand for advisory services
    • Big Four benefit from strong rise in public spending on consultants
    • COVID-19 disrupts demand in 2020, but also offers new opportunities for advisory services
    • COVID-19 boosts demand for consultancy services in digital transformation, cyber security, sustainability and supply chain expertise
    • Demand for consultancy services rebounds in 2021
      • Figure 12: UK fee income from consultancy services, 2017-21
      • Figure 13: UK fee income from consultancy services, 2017-21
    • Corporate finance and business recovery
    • Restructuring and insolvency activity expected to accelerate in 2022
    • M&A market bounces back
    • Corporate finance & business recovery services sector rebounds in 2021
      • Figure 14: UK fee income from corporate finance & business recovery services, 2017-21
    • Overseas trade in accountancy services
      • Figure 15: International trade in accountancy services, 2016-20
      • Figure 16: Exports and imports of accountancy services, 2016-20
  6. Market Forecast

    • Corporate finance, restructuring and advisory services to drive post COVID-19 growth
      • Figure 17: Category outlook, 2022-26
    • Market expected to demonstrate sustained growth to 2026
      • Figure 18: Forecast UK market segmentation for accounting & financial management, by type of service, 2022-26
      • Figure 19: Forecast UK market segmentation for accounting & financial management, by type of service, 2021-25
    • Market drivers and assumptions
      • Figure 20: Key drivers affecting Mintel’s market forecast, 2015-26
    • Forecast methodology
  7. Market Trends

    • Investment in technology to help improve audit process and quality
    • Consulting services remain key drivers for business growth
    • Digital transformation of business represents a key driver for the consulting services sector
    • Big Four lead the global market for cybersecurity consulting services
    • The growing recognition of ESG issues and ESG reporting requirements presents strong opportunities for accountants
    • Firms commit to regional expansion
    • The Big Four continue their advance into the legal services sector
    • Big Four legal teams at forefront in investing in LawTech
    • Cloud technology enables accountants to work smarter and get closer to clients
    • ‘Big data’ and data analytics represent growth areas for accountants
  8. Regulatory and Legislative Environment

    • Industry regulation
    • Audit market reforms open up market to increased competition
    • Barriers for challenger firms remain
    • Further audit reforms on the way to improve competition and drive up quality
    • Making tax digital
    • Crackdown on tax avoidance
  9. Market Drivers

    • Number of active businesses in the UK
      • Figure 21: Number of private sector businesses in the UK, 2007-21
      • Figure 22: Number of private sector businesses in the UK, 2007-21
      • Figure 23: Number of VAT and/or PAYE-registered enterprises in the UK, by broad industry group, 2016 and 2021, (Number and %)
    • COVID-19 disrupts growth trend in self-employment…
      • Figure 24: Self-employed workers in the UK, 2012-21
    • …But pandemic ignites strong rise in business start-ups
      • Figure 25: Number of newly incorporated companies in the UK, 2018-21
      • Figure 26: Number of newly incorporated companies in the UK, 2015-21
    • Insolvencies rise in 2021, but remain below pre-pandemic level
      • Figure 27: Number of company insolvencies, receiverships and administrations in England & Wales, 2011-21
    • Corporate credit conditions
    • M&A activity rebounds in 2021 and set for further surge
      • Figure 28: Mergers and acquisitions involving UK companies, 2008-21
    • Uptick in IPO activity in 2021
      • Figure 29: Number of main market and AIM-listed companies, 2011-21
      • Figure 30: Number of main market and AIM-listed companies, 2013-21
  10. Industry Structure

    • Overview
      • Figure 31: Top 20 accounting firms in the UK, by fee income, 2021
    • Number of audit firms gradually declining
    • Small shift of FTSE audit market share from Big Four to non-Big Four firms
    • Industry Structure
      • Figure 32: Analysis of the changes in the structure of the UK accounting, bookkeeping, auditing and tax consultancy industry, 2017-21
    • Structure by employment
      • Figure 33: Analysis of the employment structure of the accounting, bookkeeping, auditing and tax consultancy industry, 2020 and 2021
    • Structure by turnover
      • Figure 34: Analysis of the financial structure of the UK accounting, bookkeeping, auditing and tax consultancy industry, 2020 and 2021
      • Figure 35: Analysis of the financial structure of the UK accounting, bookkeeping, auditing and tax consultancy industry, 2021
    • Trends in acquisitions, partnerships and alliances
  11. Competitive Strategies

    • Deloitte and KPMG sell off restructuring divisions to avoid “conflict of interest” with audit clients
    • PwC sells global mobility tax and immigration business for $2 billion
    • PwC launches new global strategy and commits to major investment
    • EY invests in technology, audit quality and skills
    • EY launches new sustainability service offering
    • Grant Thornton launches new Economic Consulting practice
    • PwC plans to double size of its UK legal arm
    • Acquisition bolsters Deloitte’s AI and data solutions capabilities
  12. Company Profiles

    • BDO LPP
    • BDO and Moore Stephens merger
    • Company performance
      • Figure 36: Financial analysis of BDO, 2017-21
      • Figure 37: Segmental turnover analysis of BDO, 2021, (£m and %)
    • Deloitte LLP
    • Deloitte Legal enhances its legal offering with acquisition of Kemp Little
    • Deloitte acquires technology consultancy Keytree
    • Deloitte to expand its consulting team in the North
    • Deloitte sells its UK restructuring arm
    • Acquisition bolsters Deloitte’s AI and data solutions capabilities
    • Recent investments
    • Financial performance
      • Figure 38: Financial analysis of Deloitte, 2017-21
      • Figure 39: Segmental turnover analysis of Deloitte, 2021, (£m and %)
    • Ernst & Young LLP
    • EY expands legal offering through Riverview Law acquisition
    • EY expands SAP consulting capabilities with AgilityWorks acquisition
    • COVID-19 Enterprise Resilience Framework
    • Investing in audit quality
    • Investing in technology, skills and innovation
    • EY launches Neuro-Diverse Centre of Excellence in the UK
    • EY launches new sustainability service offering
    • Financial performance
      • Figure 40: Segmental turnover analysis of EY, 2021 (£m and % of total)
      • Figure 41: Financial analysis of Ernst & Young, 2016-20
    • Grant Thornton UK LLP
    • Grant Thornton restructures to serve three strategic markets
    • Grant Thornton no longer bids for FTSE 350 audit work
    • Grant Thornton sells wealth advisory arm to focus on core markets
    • Grant Thornton launches new Economic Consulting practice
    • Financial performance
      • Figure 42: Segmental turnover analysis of Grant Thornton, 2020, (£million and %)
      • Figure 43: Financial analysis of Grant Thornton UK, 2016-20
    • KPMG LLP
    • Global KPMG network commits to major investment in technology, people and innovation
    • KPMG sells restructuring division
    • Financial performance
      • Figure 44: Segmental revenue analysis of KPMG, 2021, (£ million and % of total)
      • Figure 45: Financial analysis of KPMG, 2017-21
    • Pricewaterhouse Coopers LLP
    • PwC launches new global strategy and commits to major investment
    • PwC sells global mobility tax and immigration business for $2 billion
    • PwC to create 1,000 roles at new Manchester technology hub
    • PwC acquires supply chain consultancy Olivehorse
    • PwC plans to double size of its UK legal arm
    • Financial performance
      • Figure 46: Segmental turnover analysis of PwC, 2021, (£m and % of total)
      • Figure 47: Financial analysis of PwC, 2017-21
    • RSM UK Holdings
    • Company performance
      • Figure 48: Segmental turnover analysis of RSM UK Holdings, 2021, (£million and % of total)
      • Figure 49: Financial analysis of RSM UK Holdings, 2017-21
  13. Appendix – Data Sources, Abbreviations and Supporting Information

    • Abbreviations
    • Methodology
  14. Further Sources and Contacts

    • Trade associations
    • Trade magazines
    • Trade events

About the report

This market report provides in-depth analysis and insight supported by a range of data. At the same time, introductory and top-level content is provided to give you an overview of the issues covered.

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Data

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*databooks not available with UK B2B Industry reports.

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