LAST YEAR did not bring the growth in the tax service line that some might have hoped for.
Only 11 of the 35 firms in the Top 50 that submitted tax statistics increased their tax income, and only one of those – PKF – is in the top ten firms overall.
Tax income decreased for 18 firms, including eight in the top ten. Ernst & Young were the biggest losers of the big firms, with an 8.2% decrease.
However, it retained its place above KPMG as the third biggest tax firm. The difference between the Big Four and the rest was again stark, with fourth place KPMG bringing in around £260m more than Grant Thornton in fifth. BDO was another big loser, with its tax take decreasing by 8% to fall further behind Grant Thornton.
The picture was slightly rosier further down the table. Not including the top ten firms, an equal number of companies reported increases tax incomes as reported a decrease. Mid-tier firms such as MacIntyre Hudson, Wilkins Kennedy and Menzies all reported growth in the area. Buzzacott reported an increase of 11%, similar to its increase the previous year, and is close to hitting £10m income.
Further down, Hazlewoods reported a 29% increase in its tax income, the highest of any firm in the Top 50.
Tony Flambard, finance partner, said that this was the result of focusing on tax planning. He remarked: “Compliance is relatively static: the key is in tax planning, where the additional staff have come in specifically to work on research and development, employer financed retirement benefit schemes, incorporations, capital gains tax and stamp duty.”
However, the firm still took in less than its immediate competitors among the Top 50.
Anderson Anderson & Brown (AAB) and Mercer & Hole remain the big hitters towards the lower end of the Top 50, with the former increasing its income by 25.6%. It is perhaps indicative of the state of the tax service industry that this increase can be put down to its niche in the market.
Alan Paterson, operations director at AAB, said that some of this could be attributed to its employment and the expatriate division, which was started five years ago: “We have established ourselves in the marketplace as a provider of this. Being in Aberdeen, we have the North Sea oil companies, so there is the issue of resident or non-resident for employees.”
Senior appointments in corporate and personal tax were also a factor, he added.
View the full survey here.
Access our new Top 50 +50 interactive data analysis tool, encompassing Top 50 survey results back to 1997
Carter Backer Winter has acquired Edwards Financial Services, expanding its financial planning department
New growth opportunities in Aberdeen, North East Scotland, are being invested in by Grant Thornton
Colin responds to the call for 'Darwinism' in accountancy
A new partner, Dermot Callinan, has joined Saffery Champness from KPMG where he was recently the head of the UK private client advisory team