Buying into an Accountancy Practice
Lucinda Kitchin of A.P.M.A. assesses the position of those asked to buy into an accountancy practice and outlines the key questions you should ask before you sign on the dotted line.
What to weigh up before you commit — updated for 2026
Spend any time looking at listings of accountancy practices for sale and you’ll notice a striking gap between the smallest and largest opportunities on the market — but the overwhelming majority of what’s actually for sale still falls into the ‘small firm’ category.
That’s a reflection of just how flat the size profile of UK accountancy firms really is. At one end, the UK’s largest firm by fee income, PwC, reported UK fees of around £6.36 billion for the year to June 2025 (Accountancy Age Top 50+50 rankings, published December 2025); by the time you reach the thirtieth-largest firm in that same ranking, fee income is already down in the tens of millions. The vast majority of the roughly 40,000-plus accountancy firms operating in the UK sit well below that — the market is dominated by sole practitioners and small partnerships, not the household names.
Because of that flat profile, most purchasers are themselves owners of small firms looking to acquire other small firms or blocks of fees — though this is shifting as the market changes, with a growing share of activity now driven by private-equity-backed consolidators pursuing scale rather than individual practitioners pursuing organic growth.
Demand is real — and so is competition
The good news about buying fees is that a block without attached overheads represents an excellent way for a firm to grow profitability by making fuller use of existing capacity, without necessarily adding to costs. The less good news is that most practices for sale attract serious interest. We oversaw the sale of a practice with fees of £130,000 in the North London area very recently which came with one expensive member of staff who was to be retained. That drew interest from 145 would-be buyers; not long before that a block of £140,000 in the Essex area attracted 43 purchasers; and a block of £115,000 of compliance fees in Daventry drew a relatively modest 23 applications, also within the last 12 months or so. If you’re serious about buying, you need to be ready to compete.
The upside is that purchasers have historically been reluctant to pay above the going rate — typically a multiple of 1.0x to 1.2x annual recurring turnover, with significantly more being achievable for a particularly profitable practice or where buyer competition is especially strong. That keeps the risk of being gazumped by another buyer fairly low, though it does happen from time to time. It also means a seller can usually afford to be selective about who they sell to, weighing up geography, turnover, professional qualifications and charge-out rates — but relevant prior experience is, almost without exception, a must.
Financing the purchase
External funding for a practice purchase can be harder to arrange than for other kinds of business acquisition, largely because there are few of the ‘hard assets’ — machinery, equipment, property — that third-party lenders typically like to see as security. Specialist lenders who understand professional-services acquisitions exist and are worth seeking out specifically, rather than approaching a general business lender cold; we can point buyers toward lenders we know are comfortable with this kind of deal. Because consideration is almost always staged in tranches over the following one to three years, the up-front capital requirement is often considerably lower than buyers initially expect — worth factoring in before ruling out a purchase on cost grounds alone.
Fifteen key issues when buying into an accountancy practice
- Do you have, and do you need, a practising certificate? Requirements have tightened in recent years, so check current ICAEW (or your own body’s) rules rather than assuming.
- Are you comfortable delivering a personal service where little is tangible and everything depends on the quality of the relationship?
- Do you have the interpersonal skills to grow the fee base to the point where you can take on and retain staff? Charge-out rates set too low leave no margin to hire junior fee-earners, which traps the principal doing both the high- and low-level work — long hours, an isolated working life, and no obvious way out.
- Will the client relationship actually survive the transfer? If the seller has been ‘the business’ in clients’ eyes, how confident can you be they’ll transfer across? Our experience is that a well-handled sale, where the seller’s relationship with clients is strong, tends to transfer more successfully, not less — but the handover has to be managed properly.
- You’ll want protection if purchased clients don’t transfer through no fault of your own — a suitable clawback clause in the Sale and Purchase Agreement covers this. Remember you carry real risk if the seller intends to keep practising locally afterwards.
- What are you actually buying? There’s no contractual ‘ownership’ of a client — they can walk at any time — so the real asset changing hands is goodwill, not a guarantee.
- What handover period will the seller give you? Some light-touch handholding, or ongoing consultancy support for a period — decide what you need and negotiate for it.
- How does the seller currently service clients — visiting them, or having them bring books into the practice — and does that match how you intend to operate?
- Are you buying individual client fee income, or the aggregate sum? The difference matters for how clawback is calculated — ask your broker to walk you through it if you’re unsure.
- Are the fees portable to another location, and if so, how far could you realistically move them without risking clients or losing staff?
- How easily could a senior employee leave and become your competitor? Check whether suitable restrictive covenants are in place in their contracts.
- Due diligence needs to cover client files and time records to confirm the fees are being serviced profitably, and confirm AML and data-protection compliance is current — bringing any of it up to date is an additional cost and task you’ll need to budget for.
- Decide whether to instruct your own solicitor or use a standard Sale and Purchase Agreement template — we provide one free of charge as part of our service to buyers.
- What can you do to build the business further? Could you offer additional services, service clients more profitably, or incentivise referrals to grow the base you’ve bought?
- As a rule of thumb: if each partner or sole practitioner holds a client base worth £200k or more, and their share of gross payroll cost is no more than a third of turnover, the practice should be capable of a 50% net margin, with working capital typically running at three to four months of turnover.
What’s changed since we last updated this
A few things are worth factoring in that weren’t as prominent a few years ago. Clients now expect a digitally-fluent adviser as standard, not a nice-to-have — MTD became mandatory from April 2026 for sole traders and landlords with income above £50,000, so a practice without modern, MTD-ready systems is inheriting a technology debt alongside its goodwill. Separately, the wave of private-equity-backed consolidation among the largest UK firms is, indirectly, increasing the supply of opportunities available to independent buyers, as consolidators focus on scale and integration and release blocks of clients that don’t fit their strategy. And anti-money-laundering supervision is being restructured, with the FCA set to become the single AML/CTF supervisor for the sector over the next few years — worth knowing about, even if the practical impact on a purchase is still some way off.
None of this changes the fundamentals: an accountancy practice can generate higher-than-average profit margins compared with most other kinds of business, and provides an excellent platform to grow from — the value increases as it grows, and a good income stream follows for the owner.