accountancy and allied services market presentation
TRANSCRIPT
UK accountancy and allied services marketJULY 2016www.irn-research.com
A free presentation from IRN Research
About IRN Research www.irn-research.com
IRN Research is a full-service research agency with research capabilities from small-scale research requests to large-scale international projects. We utilise a range of research techniques, e.g. desk research, telephone/online surveys, face-to-face interviews, focus groups, and can provide a full results analysis. We undertake a wide range of research for professional services firms including:
Customer Experience Research: We identify what your customer thinks of
your company and brand and what drives such perceptions. Customer Segmentation: We identify and assess how to target customer
sub-groups, using a variety of data including attitudinal and usage information plus consumer demographic and business structure data.
Market Understanding: We seek to understand the market you operate in by running usage and attitude surveys and undertaking desk research to come to a clear understanding of your customer’s needs and potential growth opportunities.
Structure• In 2015, just over 41,000 firms were active in the accountancy and allied
services market, collectively employing over 300,000 individuals.
• Over eight-in-ten firms engaged in the market undertook accountancy and audit activities.
• Most accountancy and allied service firms serve a local catchment area with only the larger firms serving a regional or national market. As such, most firms active in the market are small in size: over 90% employ fewer than 10 people
Structure
0-49k29%
50k-99k31%
100k-249k25%
250k-499k7%
500k-999k4%
1m+4%
Percentage of Businesses by Turnover (£000)
Structure
Structure While the industry is dominated by small companies, the big four
players – PWC, Deloitte, EY and KPMG – collectively account for 42% of the industry turnover.
* Formerly Baker Tilly** Including Chantrey Vellacott DFK
Moore Stephens**
Mazars
Smith & Williamson
RSM*
BDO
Grant Thornton UK
KPMG
EY
Deloitte
PwC
0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0%0.4%
0.6%
0.9%
1.3%
1.7%
2.2%
8.4%
8.6%
11.7%
13.2%Share of industry turnover, 2015
% of turnover, 2015
Structure• It’s a dynamic market with many new businesses entering the market
each year and the number of firms having risen by around 26% between 2011 and 2015
• One-third of firms started in business in the last four years• London and the South East account for 43% of accountancy and audit
businesses
2011 2012 2013 2014 20150
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
28,740 30,180 30,410 32,480 34,255
3,2903,945 4,405
4,8655,760
8751,025
1,2001,320
1,420
32,90535,150
36,01538,665
41,435Number of firms
Accounting and auditing activities Bookkeeping activitiesTax consultancy
Market Size and Trends
• Industry has a collective turnover of over £23 billion.
• Market turnover moves closely in sync with the trends in the UK economy.
• Between 2012 and 2015, turnover grew at an annual average rate of 3.5% but in 2016 IRN Research anticipate growth of just 0.3%.
• Brexit and new auditing rules will slow business turnover in 2016
Market Size and Trends
2011 2012 2013 2014 2015 2016 (est)£19,500
£20,000
£20,500
£21,000
£21,500
£22,000
£22,500
£23,000
£23,500
£24,000
£22,073
£21,016
£21,509
£22,417
£23,287 £23,348
Industry Turnover (£m), 2011-2017
Impact of Brexit• The UK market is very self-contained - firms export only around 10% of their services and only
3% of the domestic market is supplied by imported services
• But Brexit is anticipated to have a negative impact on the market with the scale of the Brexit hit varying according to the trade deal the UK arranges with the EU
• The biggest consumers of accountancy services in the UK are financial and professionals services firms who will be hit by leaving the EU
• In IRN Research’s report The Impact of Brexit on Consumer Financial Services, IRN laid out three scenarios for the future course of the UK economy:
• Scenario 1 (No-Brexit): Brexit did not happen and the economy grows in the fashion laid
out by the Office of Budget Responsibility in its March 2016 forecasts• Scenario 2 (EEA): The UK arranges a European Economic Area style deal with the EU• Scenario 3 (WTO): The UK arranges a World Trade Organisation style deal with the EU
Impact of Brexit
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021£20.0
£21.0
£22.0
£23.0
£24.0
£25.0
£26.0
£27.0
£28.0
£21.0£21.5
£22.4
£23.3
£24.1£24.6
£25.3
£26.0
£26.7
£27.4
25.0318373169368
25.8565828675238
26.5731879167063
23.914012593841523.851943868082724.075409558412524.4253373169368
25.3317828675238
26.0373879167063
No-Brexit Brexit (EEA) Brexit (WTO)
Turnover (£ billion), 2012-2021
Key issues
Audit Rotation and new rules Cloud outsourcing of the accounting function Move from providers of data to providers of
consultancy services Negative public perceptions of tax planning and
avoidance Advent of online tax accounts by the HMRC from 2017
IRN Research www.irn-research.com
To download a copy of the Accountancy and Allied Services Market report visit
http://www.irn-research.com/wp-content/uploads/2016/07/ACCOUNTANCY-AND-ALLIED-SERVICES-MARKET.pdf
To discuss your research requirements contact
Gary Giddings – [email protected]