BANK WRITE-OFFS to professional service firms have now fallen to their lowest level last year, since just after the recession began, according to an independent finance provider.
Write-offs were £264m in 2013 compared to £259 in 2009 for all law, accountancy and other unincorporated firms for the year ending 30 September 2013, according to Syscap.
Write-offs to firms hit a high of £315m in 2010 declining to £292m in 2011 and £278m in 2012.
Despite high profile collapses such as RSM Tenon and law firm Manches, the professional service sector is now a better credit risk for lenders.
Philip White (pictured), CEO Syscap, said: “Legal and accountancy firms performed relatively well during the recession compared to other sectors, there has been a perception more recently that lending to the sector is becoming high risk, and this has impacted heavily on bank lending.”
“For accountancy firms the drop off in consulting and transactional work that is normally associated with recession has been somewhat offset by more insolvency work and the very militant approach that HMRC has been taking on suspected tax evasion, which has created more work for parts of their tax teams.”
The professional services sector saw a decline in critically distressed businesses in the fourth quarter of 2014 compared to the previous quarter, according to a Begbies Traynor Red Flag report on financially distressed companies.
There was a 21% decline of professional service firms that were in critical distress for the fourth quarter of 2013, compared to the previous quarter. There were 68 critically distressed firms in Q4 2013 from 77 in Q4 2012.
Richard White, Nicola Westbrooke and Richard Ross all join from KPMG, where they oversaw the real estate tax practice
Sheryl Davis joins the firm's High Wycombe office from Barnes Roffe
The appointments have been made across the VAT, audit and international tax teams
The firm has made six partner appointments, including five promotions, to the audit, corporate finance and private client tax practices