IT LOOKS AS THOUGH it's back to square one as far as tax is concerned.
In general, there has been about 5% growth over the past year in fee income for the tax functions across the Top 50 +50 firms, according to Accountancy Age's research.
That sees the market come full circle back to where it was in 2008, before the financial crisis took hold.
The 2012 figures see the Top 50's tax service lines worth just shy of £2.5bn, just as they were in 2008, about £162m up on 2011.
Unsurprisingly, the Big Four make up the bulk of those numbers, taking £1.94bn this year, up from £1.85bn last year, and even higher than the £1.91bn taken in 2008.
Reversing those figures outlines their dominance more starkly. The rest of the Top 50's tax services are worth £555m today, up from £481m last year, but still £4.9m shy of their state four years ago, when they took £559.9m.
The picture, then, is encouraging in some ways. The market has made a tentative recovery, but it goes to show quite effectively just how hard the past four years has been. Whether that recovery is sustained is also uncertain.
Joe Burnie, head of tax at Baker Tilly, is far from surprised at the upturn, given that the coalition government has placed such emphasis on tax as a policy issue.
"We've seen the biggest number of consultations this year for a long time," he says. "Clients are doing two things. Firstly, they want to understand the changes and be able to comply with them, and secondly, they are looking for mitigation ideas."
At a glance, the biggest winner this year was Francis Clark, which saw tax fee income skyrocket 27% to £6.65m.
Steve Collins, senior partner and head of tax, puts such impressive growth down to a merger with Cornish firm Winter Rule, which saw about 20 extra tax staff brought in.
Another upwardly mobile firm was Saffery Champness, which had more than 14% growth in tax fee income, largely underpinned by the expansion of its tax team, with the addition of a sports and entertainment arm in January 2011.
Managing partner Jonathan Fox said his firm had "stuck to what it's good at" in the tough economic conditions.
"We said, ‘Look, we really want to build this [sport and entertainment tax services] – let's go and get some people'. So that's what we did," says Fox matter-of-factly.
Julian Hedley, formerly of Tenon, was brought in at Saffery's as partner alongside three others, while further recruiting took place across the rest of the tax team.
When examining the figures, it becomes clear that, while much of the news is heartening, not a lot of that growth is organic, with some suggesting mergers and acquisitions could be distorting the picture.
Indeed, Smith & Williamson's Richard Mannion is cautious, and somewhat uncertain about what's driven the modest growth.
"I'm surprised to see 5% growth on last year. It's hard to put your finger on why that would be the case. The circumstances today in the economy are very similar to what they were last year and two years ago," he says, and draws an analogy between London and the Big Four: you can't tell how well the UK is doing based on London, nor does the Big Four accurately reflect the rest of the market.
With that in mind, the question is: can growth be strengthened and sustained?
The fact that there is almost uniform growth for 5% across the market is encouraging, and demonstrates there is a common factor affecting all firms positively.
Grant Thornton tax partner Francesca Lagerberg is more optimistic than most, putting the growth down to businesses realising they can "no longer wait for the perfect time" to make transactions, and the rise in tax fee incomes is a sign that those transactions are now being made.
"A lot of people just put everything on hold for a period of time," she says. "They were concerned; they weren't sure where the economy was going.
"There were a lot of worries about the unknown, and after a period of time, you either become comfortable that those concerns aren't something you need to worry so much about, or you get comfortable you can handle them, or you get to a point where you just can't wait anymore if you're going to keep on growing your business. It's a temporary dam that's slowly burst."
Some are still nonplussed by the growth, and continue to remain sceptical, but as any economist will tell you, a change in mood can go a long way, and a return of positive figures is likely to lead to greater confidence.
The coming year is a colossal test for accountancy, and indeed tax. If the tentative growth can continue – and, hopefully, accelerate – then the market can leave the doldrums behind.
But that is a big ‘if', and falling back would leave a very serious dent in the recovery. The "green shoots" – a phrase used by Lagerberg – are still embryonic, and they must be carefully cultivated if they are to thrive.
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