The number of UK accountancy practices has dropped by 2% in the last year and 15.5% over the last five years.
According to Syscap, an independent finance provider to the professional services sector, the number of UK accountancy firms has fallen by 136 in the last year. 1,335 accountancy firms overall have left the high street in the the last five years.
Syscap attributes the drop in numbers to the relaxation of audit thresholds in 2012, which meant that many companies can now choose whether or not to be audited. Before 1 October 2012, businesses could qualify for an exemption if they had a maximum balance sheet total of £3.26 million and less than £6.5 million turnover. Now, businesses can obtain an exemption if they meet two out of three criteria relating to balance sheet total, turnover and employing a maximum of 50 staff.
Philip White, Chief Executive of Syscap, called the relaxation of audit thresholds as: ‘extremely problematic’ for accountancy firms, as ‘auditing is a business they rely on for their bread and butter.’