Tax advisory services took a hit in the recession, but revenue has recovered
London, United Kingdom (PRWEB) February 21, 2013
The Tax Consultants industry provides income tax return services to personal and business clients and offers advice on tax-related business issues. The industry is expected to record relatively slow revenue growth during the five years to 2012-13, expanding at a compound annual rate of 1.3% to reach £4.25 billion. According to IBISWorld industry analyst Andrew Johnson, “this has mainly resulted from falling demand for the industry's tax advisory services following the financial crisis and the subsequent uncertain economic climate”.
Tax advisory services are the most volatile industry segment. Demand is closely linked to the overall state of the economy and has declined sharply during the past five years, due to the recession and the reduction in corporate transactions that require tax-related advice. However, the industry's tax return service segment has proven relatively stable during the recession as private and corporate clients are required to file tax returns regardless of the state of the wider economy. This has helped stabilise the industry in a difficult period and made possible the 2.3% revenue growth anticipated in 2012-13.
The industry is expected to gradually return to more solid growth over the next five years through 2017-18. Growth will be driven by continuing demand for tax returns, a gradual recovery in business demand for tax advisory services and changes to taxation regulations. Johnson adds, “the fallout from a number of high profile tax avoidance cases will prompt legislation in early in the period, which will reduce illegal tax avoidance and trigger a rise in demand for consultancy services as individuals and businesses seek alternative tax planning services”. The European Commission's proposed audit reform is also likely to indirectly affect the Tax Consultants industry by limiting the services provided by major industry players.
The Tax Consultants industry has a medium level of market share concentration, with the four largest firms – PricewaterhouseCoopers, Deloitte, Ernst & Young and KPMG – accounting for 48.5% of industry revenue. Although the top four firms hold strong market share and dominate the tax advisory segment, there is a large number of small firms offering tax return preparation services to private individuals and small businesses throughout the United Kingdom. The dominance of the major competitors in tax advisory services clearly does not reduce the scope for small businesses to operate profitably.
For more information on the Tax Consultants industry, including latest industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld, the nation’s largest publisher of industry research.
IBISWorld industry Report Key Topics
Firms in the Tax Consultants industry prepare personal and business income tax returns and offer tax advisory services and non-legal representation before tax authorities. However, industry operators are not responsible for offering comprehensive management consultancy services like accounting services or the provision of budgetary control procedures. These services are provided by the Financial Management industry.
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