For as long as I’ve been an accountancy broker, the “1.2x” figure has been the magic number whispered in corridors and at ICAEW regional networking events. It was the standard. The benchmark. The expectation.
But as we sit here in July 2026, the question I’m asked most often when I’m carrying out an accountancy practice valuation is: “Peter, is 1.2x still the reality, or is it a relic of the past?”
The honest truth? It depends on who you ask. If you look at the broad market, the answer is a nuanced "maybe." If you look at your specific firm, the answer might be "not even close" or "you’re worth much more."
The landscape of accountancy mergers and acquisitions has shifted significantly over the last few years. The days of a flat multiple regardless of quality are gone. Today, accountancy practice buyers are more discerning, the retiring accountant is facing new pressures like the full integration of MTD ITSA, and the definition of value has evolved.
In this post, I want to pull back the curtain on how I value practices today and what you: as an owner looking to sell your practice or a buyer looking for a practice acquisition: really need to know.
The Death of the "One Size Fits All" Multiple
Historically, the UK market for accountancy practices for sale revolved almost entirely around recurring fees. You took your Gross Recurring Fees (GRF), applied a multiple (usually between 1x and 1.2x), and that was your price.
In 2026, the "standard" band for a compliance-heavy, average-growth firm has tightened to 0.8x to 1.2x GRF.
Why the compression? It’s not that accountancy is less valuable: far from it. It’s that the risks have changed. Buyers are no longer just buying a block of fees; they are buying a business model. If your firm is still reliant on manual processes or has a client base that hasn’t moved to cloud accounting, a buyer is going to factor in the heavy cost of modernising your workflow.
However, I am still seeing deals close at 1.5x or even 1.7x GRF. These "premium" multiples aren't handed out by accident. They are reserved for firms that have high-quality recurring fees, low client churn, and a tech-stack that makes the transition seamless.
GRF vs. EBITDA: The Professional Shift
While the small practitioner market still talks in GRF, larger firms and private equity-backed consolidators have moved almost exclusively to EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization).
When I work with clients at Bains Watts, I often run a dual valuation.
- For the Sole Practitioner: We look at the practice sale through the lens of GRF because it’s simple and reflects the "lifestyle" nature of the business.
- For the Multi-Partner Firm: We look at normalized EBITDA. In 2026, a well-run UK practice can fetch anywhere from 3x to 6x EBITDA.
The reason for this shift is "transferable economic value." A buyer wants to know what is left in the pot after all the costs: including a market-rate salary for the directors: are paid. If your 1.2x GRF valuation results in a 10x EBITDA because your costs are too high, a savvy accountancy broker or buyer will spot the discrepancy immediately.
If you are a retiring accountant thinking about your exit, you need to look at your margins as much as your top-line revenue.
What is Driving Your Practice Valuation in 2026?
When I sit down to value a firm, I’m looking at several key levers. If you want that 1.2x (or higher) multiple, these are the areas you must focus on:
1. The MTD ITSA Factor
By now, Making Tax Digital for Income Tax Self Assessment is fully rolled out. Buyers are looking for firms that have already navigated this transition. If your clients are "MTD-ready," you are a much more attractive prospect for practice mergers UK. If you’re selling a bookkeeping business for sale alongside the main practice, ensure the digital trail is clean.
2. Client Concentration
Are 30% of your fees tied up in one large client? That’s a massive risk for a buyer. A diversified client base with a wide range of industries is far more stable and commands a higher multiple.
3. Staffing and Leverage
In 2026, the "war for talent" in the accountancy profession hasn't slowed down. A practice with a strong, settled team and a clear management structure (where the owner isn't the only person who can talk to clients) is worth significantly more than a "hero" practitioner who does everything themselves.
4. Niche Positioning
Specialist firms: those focusing solely on e-commerce, medical professionals, or construction: often bypass the 1.2x ceiling. Accountancy practice buyers will pay a premium for niche expertise because it’s harder to replicate.
Selling Your Practice: The Importance of Confidentiality
One thing that hasn't changed since I started Bains Watts is the need for absolute confidentiality. Whether you are looking at Vivian Sram or Retiring Accountant, the best brokers in the business know that the moment your staff or clients hear you are "on the market" without a proper plan, the value of your practice begins to leak.
When you work with me, you deal with me directly. No call centres, no junior account managers. We protect your legacy while finding the right accountancy practice merger or sale that fits your goals.
Summary of the 2026 Landscape
If you are looking to buy a practice or sell your firm, here is the quick breakdown of where we are:
- Average Compliance Practice: 0.8x – 1.0x GRF.
- Modern, Efficient Practice: 1.1x – 1.3x GRF.
- High-Growth / Niche Specialist: 1.4x – 1.7x GRF.
- Corporate / Multi-Partner: 4x – 6x EBITDA.
The "1.2x" multiple isn't dead, but it's no longer the default. It’s a target. To hit it, you need to show that your recurring fees are secure, your systems are modern, and your exit won't cause a client exodus.
Ready to discover your true practice value?
Valuing a business you’ve spent decades building is emotional, but the market is clinical. My job is to bridge that gap with honest, experienced advice and a truly personal service.
If you are a retiring accountant in the UK considering a practice sale, or if you want to buy an accounting practice to grow your portfolio, let’s have a confidential chat. No pressure, just a professional conversation about your options.
Book a consultation with Peter Watson here
Whether you’re just starting to think about an acquisition or you’re ready to sell your practice tomorrow, I’m here to guide you through to completion.
Peter Watson
Expert in the Sales, Purchases & Valuations of Accountancy Practices
www.bainswatts.co.uk