Hello there. It’s Thursday, the 2nd of April 2026, and if you’re running an accountancy firm in the UK right now, you’ve likely noticed that the ground is shifting beneath your feet.
I’m Peter Watson, and for years I’ve been helping practice owners navigate the highs and lows of the M&A market. Lately, the question I’m getting more than any other is: "Peter, have we hit the ceiling? Are accountancy practice valuations in the UK finally peaking?"
It’s a fair question. We’ve seen a decade of relatively steady growth in accounting firm GRF multiples, but as we move further into 2026, the landscape is becoming more complex. Whether you are a retiring accountant looking for an exit strategy or an ambitious firm owner looking for your next practice acquisition, understanding the current temperature of the market is vital.
Here is my take on why 2026 is the most critical year we’ve seen in a generation for accountancy practice valuations.
1. The Private Equity "Cooling" or "Calibration"?
Over the last three years, we’ve seen an unprecedented surge in Private Equity (PE) money entering the accountancy sector. In fact, research shows that nearly 20 of the UK’s top 60 firms are now PE-backed. This influx of capital drove accountancy practice valuations to historic highs as these giants raced to consolidate the market.
However, in 2026, we are seeing a shift. The "land grab" phase is maturing into an "integration" phase. PE-backed firms are becoming more selective. They aren't just buying any recurring fees; they are looking for high-quality, digitally-integrated firms that can scale.
If you are looking to sell your practice to one of these big players, the criteria have toughened. They are no longer paying top-of-the-market multiples for "compliance factories." They want strategic value. This suggests that while valuations for top-tier firms remain high, the "average" firm might see a plateauing of multiples if they haven't kept pace with the market's evolution.
2. The Talent Shortage is Impacting the Bottom Line
You don’t need me to tell you how hard it is to find good staff right now. The total cost of recruiting a senior accountant in the UK has reached eye-watering levels: often exceeding £100,000 when you factor in London-weighting salaries, recruiter fees (which are now consistently 20-30%), and the sheer cost of onboarding.
How does this affect selling an accountancy practice in the UK?
When a buyer looks at your firm, they aren’t just buying your client list; they are buying your capacity to do the work. If your staff costs are spiraling and your margins are thinning, your practice valuation will take a hit. Buyers are increasingly wary of taking on firms where the "key person" risk is high because the owner is doing 80% of the heavy lifting due to a lack of staff.
In 2026, a firm with a stable, well-paid, and efficient team is worth significantly more than a firm with the same recurring fees but a revolving door of employees.
3. The Making Tax Digital (MTD) Runway
We are now just two years away from the 2028 MTD thresholds. For many, 2026 is the "point of no return."
If you are a retiring accountant, you have a choice: you either invest heavily in the technology and process changes required to handle MTD for Income Tax, or you sell your accountancy practice now and let the buyer handle the transition.
Many buyers: especially those looking for a practice acquisition to fuel their own growth: are looking for "MTD-ready" firms. If your client base is still bringing in bags of receipts or using antiquated spreadsheets, you may find that the pool of accountancy practice buyers shrinks.
I’ve seen a bifurcation in the market this year. "Digital-first" practices are commanding premium multiples, while "traditional" firms are seeing their valuations pressured as buyers factor in the cost of converting those clients to modern systems.
4. The Tech Gap: Automation vs. Manual Labor
Digital transformation isn’t just a buzzword anymore; it’s a valuation metric. In 2026, firms that have successfully integrated AI and automation into their workflow are reporting net client fee increases of over 9%. Meanwhile, firms relying on manual processes are lagging at around 6%.
When we look at accountancy mergers and acquisitions, the tech stack is often one of the first things a buyer scrutinizes. If you are looking to sell your practice, having a clean, cloud-based operation (using tools like Xero, QuickBooks, or Dext) makes your business much more attractive.
As an accountancy practice broker in the UK, I often tell my clients: "You are selling a machine. The smoother the machine runs without you, the more a buyer will pay for it." If the machine needs a specific person to turn a manual crank every five minutes, the value drops.
5. Market Bifurcation: The Rise of the "Strategic Navigator"
The 2026 Practice Growth Benchmark has revealed a widening gap between what I call "Compliance Factories" and "Strategic Navigators."
- Compliance Factories: These firms focus on the "bread and butter" work: VAT returns, annual accounts, and basic tax. Because of automation and offshore competition, margins here are being squeezed.
- Strategic Navigators: These firms offer advisory services, tax planning, and fractional FD roles. They use the data from compliance to provide real value to their clients.
Practice valuation multiples for Strategic Navigators are currently at an all-time high. Buyers are desperate for these types of firms because the revenue is stickier and the margins are healthier. If you’ve been thinking about a practice merger UK-wide, aligning yourself with a more strategic partner could be the best way to protect your legacy and your payout.
Is 2026 the Right Time to Sell?
So, back to the big question: Are valuations peaking?
In my professional opinion, for the "traditional" firm, we are likely at the summit. The combination of rising staff costs, the looming MTD deadline, and the increased selectivity of buyers means that the "easy" high multiples of the early 2020s are becoming harder to achieve.
However, if you have a modern, efficient, and profitable firm, there is still an incredible amount of "dry powder" in the market. There are more accountancy practice buyers than there are high-quality accountancy practices for sale.
The Peter Watson Difference
Navigating a practice sale or acquisition is one of the most significant financial and emotional events of your career. This isn’t something you want to leave to a faceless call center or a massive brokerage portal where you’re just another number on a spreadsheet.
At Bains Watts Ltd, I don’t do "volume." I do personal service. When you work with me, you get me. No junior associates, no gatekeepers. I handle the confidential discussions, the valuations, and the negotiations personally.
Whether you are looking to:
- Sell your practice and head into a well-earned retirement.
- Find a bookkeeping business for sale to expand your portfolio.
- Explore accountancy mergers to achieve the scale needed to compete.
- Or simply get an updated, realistic Accountancy Practice Valuation.
I am here to provide the expert, supportive guidance you need.
The market in 2026 is moving fast. Don't wait until the "peak" is in the rearview mirror before you start planning your next move. Whether you’re a retiring accountant or an ambitious firm owner, let’s have a confidential chat about what your practice is truly worth in today’s climate.
Ready to discuss your options?
Book a confidential 1-to-1 call with me here.
You can also find more resources and insights on the Bains Watts website. Let’s make sure you get the value you’ve worked so hard to build.
Peter Watson is the Director of Bains Watts Ltd and a specialist in the sales, purchases, and valuations of accountancy practices across the UK. With decades of experience and a commitment to personal, one-to-one service, Peter helps accountants navigate the complexities of M&A with confidence.