If you’ve been in the UK accountancy world for more than five minutes, you’ve heard the "magic" number: 1.2x GRF. For decades, the Gross Recurring Fee multiple has been the holy grail of accountancy practice valuation. Sellers want it, buyers fear it, and brokers have used it as the standard yardstick for almost every practice sale.
But as we sit here in June 2026, the landscape has shifted. With the full rollout of MTD ITSA (Making Tax Digital for Income Tax Self Assessment) and the rapid adoption of AI-driven compliance, I’m often asked: Does that 1.2x multiple actually still exist?
The short answer is yes: but the long answer is that it’s no longer a one-size-fits-all calculation. In 2026, the "average" multiple is a myth. We are seeing a massive polarisation in the market.
The Widening Gap: 0.8x vs. 1.4x
When I carry out an accountancy practice valuation today, I’m seeing two very different stories.
On one side, we have the "traditional" practices: firms that haven’t fully embraced the digital shift. If your fees are still largely tied to manual spreadsheets or, dare I say it, paper records, the 1.2x multiple is likely a pipe dream. Buyers in 2026 are wary of the "analogue tax." They see the cost of migrating those clients to digital systems as a liability. For these firms, we often see a practice sale land closer to 0.8x or 0.9x GRF.
On the other side, MTD-ready practices are thriving. Firms that have already transitioned their clients to cloud-based systems and automated their quarterly reporting cycles are fetching premiums. I’ve recently assisted accountancy practice buyers who are more than happy to pay 1.3x or 1.4x GRF for a firm that is essentially "plug and play."
Why MTD ITSA is the Ultimate Valuation Driver
The April 2026 MTD ITSA rollout for those earning over £50,000 was the final nudge the industry needed. It didn't just change how we file taxes; it changed how we value a selling accountancy firm.
Buyers are no longer just looking at the total recurring fees; they are looking at the effort required to maintain those fees.
- High-Efficiency Firms: Use automation to handle quarterly updates. These firms maintain high margins despite the increased touchpoints.
- Low-Efficiency Firms: Treat MTD as a manual burden. These firms see their profit margins shrink, making them less attractive for an acquisition.
If you are a retiring accountant looking to sell your practice, the best thing you can do for your valuation is to prove that your MTD processes are seamless.
It’s Not Just About the Multiple: The Rise of EBITDA
While the GRF multiple is still the go-to for many accountancy brokers, we are seeing more and more deals: especially for firms with over £1m in turnover: moving toward EBITDA-based valuations.
Why? Because a firm with £500k in fees but 40% profitability is worth significantly more than a £500k firm with 15% profitability. In 2026, accountancy mergers & acquisitions are focused on "quality of earnings." Buyers want to see that the profit is sustainable and not entirely dependent on the principal working 60 hours a week.
As a specialist in accountancy practice mergers, I help owners look beyond the headline multiple to understand their true market value. Sometimes, a lower multiple on a higher, more stable profit base is a much better deal than a high multiple on "fragile" fees.
The "Retiring Accountant" Dilemma
I speak to many practitioners who are considering their exit strategy. Whether you are looking for a full practice sale or a phased exit, timing is everything.
Many retiring accountants worry that if they don't sell now, they’ll be stuck in the MTD loop forever. But here’s the reality: there is a huge pool of accountancy practice buyers looking for opportunities right now. Some are large consolidators, while others are younger practitioners looking for their first practice acquisition.
The key is finding the right buyer. A buyer who understands your client base and values the relationships you’ve built over decades. This is where a personal touch matters. Unlike corporate brokers who pass you off to an account manager, I work with you directly. Confidentiality is my priority: I don't just list accountancy practices for sale on a public board and hope for the best; I match them with vetted, serious professionals.
What Makes a "Premium" Practice in 2026?
If you want to hit that 1.2x or higher in today's market, here is what buyers are looking for:
- Clean Recurring Fees: Fees that are collected via Direct Debit and are tied to clear, signed engagement letters.
- Low Client Concentration: No single client should represent more than 5-10% of your total turnover.
- Modern Tech Stack: Using tools like Xero, QuickBooks, or Dext isn't an "extra" anymore: it's the baseline.
- A Solid Team: A practice that can run without the owner present for a month is worth a lot more than one where every phone call goes to the principal's mobile.
- Advisory Revenue: Firms that have successfully moved some of their compliance work into "light advisory" (cash flow forecasting, monthly management accounts) are seeing the highest practice valuation figures.
Thinking of Selling? Let’s Have a Chat
Navigating a practice sale UK wide can be daunting. You’ve spent years building your business, and you deserve a valuation that reflects that hard work. Whether you’re looking to sell accountancy practice assets, merge with a larger firm, or just want an honest accountancy practice valuation, I’m here to help.
At Bains Watts, we don't do call centers. You deal with me, Peter Watson, directly. I provide a confidential, supportive service tailored to the UK accountancy profession. No pressure, just expert advice based on real-world deals happening right now in 2026.
If you’re wondering what your firm is worth in today’s market, or if you’re looking to buy a practice to scale your current operations, let's talk.
Ready to explore your options?
Book a confidential discovery call with Peter Watson here
Key Takeaways for 2026:
- The 1.2x multiple is a benchmark, not a guarantee.
- MTD ITSA readiness is the biggest factor in price dispersion.
- Profitability (EBITDA) is becoming as important as recurring fees.
- The market for accountancy practices for sale remains strong, but buyers are more discerning than ever.
Don't leave your retirement to chance. Whether you're looking at bookkeeping business for sale options or a multi-partner accountancy practice merger, getting the right advice early is the secret to a successful completion.