New accountancy firms are opening at a faster rate than they are closing
Research from accounting information group Bloomsbury Professional said that these figures suggest the sector is bouncing back from the recession.
The number of new accountancy firms opening in 2012, which Bloomsbury says are the newest figures available, increased by 9% to 4,500, while 3,700 accountancy firms closed in the same year – a net gain of 800 more new firms.
Compared to 2010, the low point for the creation of new accountancy firms, there has been a 30% increase in the number of firms being created.
Martin Casimir, managing director at Bloomsbury Professional said, “Accountancy firms were hit hard during the recession, with the number of businesses closing down reaching all-time highs. The fact that openings are now outpacing closures is an optimistic sign for the future.
“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.”
Bloomsbury said demand for accountants may be recovering as a result of HMRC’s well-publicised campaigns that it is getting tougher on tax evaders. It also predicts that more businesses will undertake expansion plans involving M&A that require the involvement of accountants.
The positive figures for the accountancy sector are not reflected be other professions, the research found. The number of new law firms opening only jumped 3% to 2,425 in 2012, while the number of firms closing down soared 22%, from 1,775 to 2,170.
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