Accountancy firm openings outstrip closures

ACCOUNTANCY firm openings are outstripping closures, suggesting the sector is bouncing back from the recession, according to Bloomsbury Professional, a tax and accounting information group.

The number of firms opening in 2012 increased by 9% to 4,500, while 3,700 accountancy firms closed in the same year – a net gain of 800 more new firms, the research found.

Compared to 2010, the low point for the creation of new accountancy firms, there has been a 30% increase in the number of start-up accountancy firms.

“The fact that openings are now outpacing closures is an optimistic sign for the future,” said Martin Casimir, managing director at Bloomsbury Professional.

“However, even now the number of closures is still quite high, which suggests that profitability is still a big issue in the sector with continued downward pressure on fees and competition between rival firms.”

According to Casimir, demand for accountants may be recovering as a result of HMRC’s well-publicised campaigns that it is getting tougher on tax returns and tax evasion.

“Sole practitioners or small businesses who may have once filled out their returns themselves are aware that the penalties for failing to submit forms on time or incorrectly could cost them heavily, and are now choosing to pay for the services of an accountant to avoid being caught out by the revenue,” Casimir said.

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