The UK enters 2026 facing continued economic uncertainty, with a cooling economy, rising employment costs and regulatory delays creating a challenging environment for professional services firms.
Accountancy practices are grappling with fee pressure, recruitment difficulties and the need to invest in technology, all while clients remain cautious in their spending. Against this backdrop, firms are seeking resilience through innovation, collaboration and a greater focus on advisory services.
In the latest issue of the IAB, contributors from MGI Worldwide’s UK & Ireland region joined the conversation, sharing their perspectives on the shifting regulatory landscape, growing fee pressure and the accelerating pace of technological change. Joanne Kingsnorth of Seymour Taylor and Luke Prout of Cottons Group offered insights into how UK firms are responding to these challenges and identifying new opportunities for growth.
Economic pressure and regulatory uncertainty
The UK economy has shown signs of contraction, dampening business confidence and slowing growth. Rising employment costs and tax changes are putting strain on firms’ cost bases, while clients are increasingly resistant to fee increases. At the same time, delays to major regulatory reforms, particularly around audit, have created uncertainty, leading firms to delay long-term investments and strategic decisions.
Joanne Kingsnorth, joint managing director of Seymour Taylor, explains:
“The absence of a clear plan for the Audit Reform Bill is creating uncertainty for the industry. Firms are reluctant to invest in technology, restructure operations, or commit to long-term strategies because they don’t know what future compliance requirements will entail. Sudden regulatory changes could drive up costs, and uncertainty makes talent recruitment and retention harder in an area that is already difficult for many firms, with the pool of audit qualified staff reducing each year.”
Consolidation and changing market dynamics
Market consolidation is accelerating, driven by private equity investment and the pursuit of scale, broader service offerings and geographical reach. Mid-sized and smaller firms are increasingly being targeted, particularly those with specialist expertise. This trend is expected to intensify through 2026, reshaping the competitive landscape and encouraging firms to align with larger networks and multidisciplinary groups.
Luke Prout, tax partner at Cottons Group, highlights the pace and significance of this shift:
“While not all activity has been high-profile, there is a clear move towards larger networks and multidisciplinary groups. This reflects both client expectations and the economic realities of maintaining high-quality services in a more regulated environment. This is very active and will continue to be so over the next few years.”
Luke also notes rising demand for tax advisory services, particularly in business restructuring, inheritance tax planning, R&D relief and property-related tax advice. Increasingly, clients are also seeking guidance on digital transformation, management information systems and outsourced finance functions, alongside advice for those exploring international relocation and its tax implications.
Technology and the shift to advisory
Technology is becoming central to firms’ strategies, with automation transforming compliance services and reshaping fee models. As routine work becomes increasingly automated, firms are redirecting resources towards higher-value advisory services. Demand is growing for forward-looking insight, strategic planning and outsourced financial leadership, as businesses look for flexible, cost-effective solutions that help them navigate uncertainty.
At the same time, talent shortages persist, reinforcing the need for firms to invest in team culture, training and efficient systems that support productivity and service quality.
Preparing for what comes next
Across both perspectives, the picture is one of cautious adaptation. Economic headwinds, regulatory ambiguity and rising costs are testing firms’ resilience, while consolidation and technological change are redefining the market. Yet, opportunities remain for those willing to innovate, invest and broaden their advisory offering. By embracing technology, strengthening talent strategies and responding to evolving client needs, firms in the UK - and across other markets facing similar pressures - can position themselves for sustainable growth in uncertain times.
Solid rankings across the UK and Ireland
MGI Worldwide ranks an impressive 14th in the IAB's UK Networks Fee Data 2025, and 4th in Ireland, underlining the network's strong position across the region. Well done to all our UK & Ireland region members!
Click the links for more information about our contributing member firms, Seymour Taylor and Cottons Group.
To read the full UK Country Report in the December edition of the IAB, members can click HERE (login to the MGI Worldwide member portal will be required).
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