A benchmarking survey by accountancy network AVN of about 200 independent practices outside the top 50 biggest firms found that, although the average practice earned about £77,000 for each partner, after adjusting for arms length partner salary costs, the average partner actually made a loss.

Unlike the Big Four, the exception to the rule were some independent practices where the profit per partner was more than £200,000.

Steve Pipe, AVN chairman, predicted the profession would become even more polarised in 2008 ‘with some partners being able to afford their first Ferrari, most partners making losses, and some partners even needing to start selling the Big Issue to make ends meet’.

He also warned that UK practitioners risked losing their clients to professionals based in India. Pipe expected clients would start trying to drive down the cost of annual accounting services.

Further reading:

KPMG revenues top £1.6bn with bonuses of £100m

Deloitte delivers record 15.5% global growth