Proposed tax changes help bolster BDO

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Demand for professional services has picked up in spite of the credit crunch, according to BDO Stoy Hayward, the accountancy firm.

Revenue growth of 10 per cent to £159.8m in the first half of the firm’s financial year was helped by tax planning uncertainty and an increase in corporate restructuring work.

Although down on the 17 per cent growth rate seen in the previous six months to December 31 2006, the pace still represented a rise on the first half of 2007.

But Jeremy Newman, managing partner, warned the outlook was still unclear: “We’re ahead of where we thought we’d be in September, given business conditions then, but there is a much greater uncertainty over the outlook than I’ve ever seen and the most difficult piece is predicting the coming months.”

BDO’s fastest-growing business line was its tax advisory unit, helped by the government’s plans to change capital gains and non-domiciled tax regimes, which had made the team “noticeably busier”, Mr Newman said. He added that the authorities’ continued crackdown on more esoteric tax plans in favour of more straightforward schemes was also helping BDO.

Revenues from corporate restructurings grew 10 per cent, as did forensic services, due to a rise in fraud investigation work. Both units are businesses that traditionally do well in economic downturns – and are the two helping BDO break into the market for work from bigger companies.

“In terms of acting for larger corporates, there are a couple of big jobs in there that we’ve done that we wouldn’t have seen a few years ago,” said Mr Newman.

The so-called Big Four of PwC, Ernst & Young, KPMG and Deloitte dominate the work for the biggest companies, particularly in the audit field.

BDO is the sixth-biggest accountancy firm in the UK and with rival Grant Thornton, the two are known as the “mid tier”.

Of its existing audit work, Mr Newman described the current season as “challenging” as a result of the issues thrown up by the credit crunch such as valuation problems.

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