For decades, the "1.2x GRF" (Gross Recurring Fees) figure has been the holy grail of accountancy practice valuation in the UK. It was the benchmark every retiring accountant whispered at regional networking events and the baseline every broker put in their pitch decks.
But as we sit here in May 2026, the landscape has shifted. If you are looking to sell your practice or perhaps you’re a firm on the hunt for a strategic practice acquisition, you’ve likely noticed that the old rules don’t always apply.
I’m Peter Watson, and I’ve spent my career navigating the complexities of accountancy mergers & acquisitions. My goal is always to provide honest, experienced advice without the corporate jargon or the pressure of a call centre. If you’re wondering what your firm is actually worth today, let’s peel back the curtain on how valuations really work in 2026.
The Traditional Benchmark: Why 1.2x Was King
Historically, valuing an accountancy firm was relatively straightforward. You took your recurring fees, those steady, predictable monthly or annual billings from compliance and tax work, and applied a multiple. For a long time, 1x to 1.2x was the standard.
Why? Because in the world of accountancy mergers, recurring revenue is the lifeblood of the business. It’s the "block of fees" that provides security for the accountancy practice buyers.
However, relying solely on a revenue multiple is a bit like buying a house based only on its square footage without checking if the roof is leaking or if it’s built on a swamp. In 2026, the "roof" of many practices is being tested by new regulations, technology, and staffing challenges.
The 2026 Shift: Beyond the Headline Multiple
The market for accountancy practices for sale has become more sophisticated. While the GRF multiple still exists as a starting point, several factors are now pulling that number in different directions.
1. The MTD ITSA Impact
We are now deep into the rollout of Making Tax Digital for Income Tax Self Assessment (MTD ITSA). Firms that have successfully transitioned their clients onto digital platforms and automated their workflows are commanding a premium. On the other hand, if you are a retiring accountant whose client base still brings in bags of receipts, your practice valuation might take a hit. Buyers are wary of the "transition cost" required to bring a traditional firm into the modern era.
2. Profitability vs. Revenue (EBITDA)
More and more accountancy practice buyers, especially larger consolidators and PE-backed firms, are looking at EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) rather than just GRF. A firm with £500k in fees and a 40% profit margin is far more valuable than a firm with £700k in fees but only a 15% margin due to high overheads or inefficient staffing.
3. Staffing and Succession
In the current UK market, finding quality staff is the number one headache. If you are selling an accountancy firm that has a loyal, qualified, and autonomous team, your value skyrockets. If the firm is 100% dependent on you (the owner) and you want to walk away on day one, the risk for the buyer is higher, often leading to a deferred sale or a lower multiple.
What is Your Practice Really Worth?
When I carry out an accountancy practice valuation, I don’t just look at a spreadsheet. I look at the "goodwill" you’ve built over decades.
Whether you are looking to buy an accounting practice or planning your own exit, you need to consider:
- Client Concentration: Does one client make up 20% of your fees?
- Fee Levels: Are you still charging 2015 prices in a 2026 economy?
- Sector Specialism: Niche firms often command much higher multiples than general practitioners.
- Location: While remote work is standard, there is still high demand for practice for sale UK listings in specific regional hubs like London, Manchester, and the Midlands.
Navigating Accountancy Mergers & Acquisitions
The process of a practice sale is about more than just the final number. It’s about the structure of the deal. Are you looking for an outright sale, or would a practice merger UK-wide be a better fit to help you scale?
Some owners prefer a "step-back" strategy, where they stay on as a consultant for 12–24 months. Others are looking for a clean break. As a specialist accountancy broker, I facilitate these conversations with complete confidentiality. Unlike larger, corporate accountancy practice merger firms, I work directly with you. There’s no passing you off to a junior account manager. It’s my name on the door, and it’s my reputation on the line.
For the Buyers: Finding the Right Opportunity
If you are looking to buy a practice or even a smaller bookkeeping business for sale, you need to be "buyer-ready." This means having your funding in place and a clear idea of your "reverse due diligence." Why should a seller choose you over ten other interested parties? Often, it’s not just about who has the biggest chequebook, but who will look after the clients and staff the best.
The "Peter Watson" Approach to Valuations
I see many firms listed by non-specialist brokers who use oversimplified metrics. They promise the world and then fail to deliver when the due diligence begins.
My approach is different. I provide market-based, practical valuations that reflect the reality of the 2026 market. I follow the standards set by professional bodies like the ICAEW and ACCA to ensure that every acquisition or merger I handle is built on a solid foundation.
Whether you are a retiring accountant ready to hang up the calculator or a young partner looking for a practice acquisition to fuel your growth, I am here to help.
Conclusion: Does 1.2x Still Exist?
Yes, the 1.2x multiple still exists, but it’s no longer the "default." In 2026, I am seeing some high-quality, tech-led firms achieve 1.4x or even 1.5x GRF. Conversely, firms that have ignored MTD or have aging client bases might find themselves closer to 0.8x or 0.9x.
The "truth" about accountancy practice valuations is that your firm is unique. Your years of hard work shouldn't be reduced to a single, arbitrary number on a spreadsheet.
If you’re thinking about the future: whether that’s selling your practice, looking for accountancy practices for sale, or simply wanting an honest chat about what your business is worth in today's climate: I’d love to help.
Ready to discuss your practice valuation?
Book a confidential 1-to-1 call with me here.
Peter Watson
Expert in the Sales, Purchases & Valuations of Accountancy Practices
www.bainswatts.co.uk