While the UK market is very self-contained – firms export only around 10% of their services and only 3% of the domestic market is supplied by imported services - the consultancy says the overall impact of Brexit on the sector will be negative.

The scale of the hit will vary according to what kind of trade deal the UK arranges with the EU in the future. The biggest consumers of accountancy services in the UK are financial and professional services firms, who will be affected by leaving the EU.

IRN Research analysis suggests that by 2021 Brexit could cost firms 3% of turnover if the UK opts for an European Economic Area (EEA) style arrangement, rising to 5% if the option is a World Trade Organisation style deal.

It argues the main negative impact of Brexit will be felt between 2016 and 2018, because businesses will be in the dark about the future trade relationship. Thereafter, the uncertainty declines and the impact of trade arrangements take over.

Under a WTO deal by 2021, the turnover of accountancy and allied firms over the preceding five year period will be £6.4bn lower than it would have been without Brexit, the consultancy calculates. Under an EEA style deal, the drop is £4.7bn between 2016 and 2021.

IRN Research’s report also found that in 2015, just over 41,000 firms were active in the accountancy market, employing over 300,000 individuals. Most firms are small, with over 90% employing fewer than 10 people, but the Big Four collectively account for 42% of the industry turnover, which it puts at over £23bn.

The consultancy says market turnover moves in synch with the trends in the UK economy. Between 2012 and 2015, turnover grew at an average rate of 3.5%, but in 2016 IRN Research anticipates growth of just 0.3%.

In the latest Accountancy Top 75 Firms annual survey of the largest accounting firms in the UK, total fee income accounted for £12.82bn, dominated by the Big Four firms which account for 76% of total fees. 

IRN Research report,  Accountancy and allied services market, post Brexit, is here