Franchise Spotlight: Tax
Longevity, marketing reach and proven business models give tax franchises an edge in a market where lofty professional standards are paramount.
“Tis impossible to be sure of anything but death and taxes,” wrote Christopher Bullock in The Cobbler of Preston in 1716.
For the 21st-century tax franchisee, this truism speaks of an enormous market. Admittedly, most individuals don’t hire tax consultants, but businesses and the self-employed do – and
- £4.4bn tax preparation industry is growing 3% a year.
Three quartersof SMEs use external accountants and, with tax an annual obligation, repeat custom is considerable.
- Well-established tax franchises offer clients pedigree and competitive prices in a high-fee market where reputation matters.
Tax is frustratingly complex for the layman to grasp. No wonder businesses and the self-employed often outsource tax preparation to qualified experts.
Tax franchises typically prepare tax returns and VAT returns, deal with payroll and cash flow projections, and offer tax advisory services and non-legal representation before tax authorities. Businesses also seek counsel from tax advisers over the tax implications of expansion, diversification or acquisition.
Substantial fees – potentially lower through a reputable franchise’s streamlined business model – are tolerated since tax savings achieved often net clients savings overall.
An increasingly complex tax code (tax does have to be taxing, it seems) has further encouraged individuals and businesses to outsource the job of legally minimising liabilities.
If HMRC’s new online tools might empower more businesses to prepare taxes in
The industry’s capital intensity has risen as players have invested in technology, according to research firm IBISWorld.
Although the sector’s big four – PricewaterhouseCoopers, Deloitte, Ernst & Young and KPMG – account for nearly two-thirds of industry revenue, there’s a medium level of concentration overall.
IBISWorld cites access to a highly skilled workforce, a strong reputation and a loyal customer base as the principal determinants of success in this field.
There are serious ramifications for mishandling one’s tax affairs, so reputation matters. It’s reassuring then that two hallmarks of franchising – longevity and nationwide presence – suggest high professionals standards are being upheld.
Is a tax franchise for me?
You’ll probably need to be at least a part-qualified accountant or have a background in related fields like finance or insurance or in running businesses generally.
The sector’s largest franchise network, TaxAssist, also favours candidates with technical competence, commercial acumen, a friendly persona, drive and determination, and discipline to follow the model.
It’s not among the cheapest franchise
The structure of tax franchises
TaxAssist Accountants is the sector’s biggest franchise. Founded in 1995 it has around 280 UK shops and offices servicing more than 65,000 clients.
The firm serves a segment – small businesses and the self-employed – it believes has traditionally been ignored by large firms and “over-charged and under-serviced” by smaller practices.
TaxAssist, which has attained a five-star franchisee satisfaction score from Smith & Henderson, offers fixed fees, paid monthly to spread costs, and uses
Eschewing the staid conservativism of traditional practices, it has built a widely recognised brand through colourful signage and prominent high street locations.
Offering training and ongoing support, tax franchises help qualified accountants become their own boss without being distracted from their core competencies. Alternatively, it’s a viable route into a lucrative sector for those in similar fields like finance and insurance.
Marketing support might cover PR, social media, telemarketing and AdWords campaigns. Via phone or online booking systems head office should process and relay to you leads from within your exclusive territory.
Initial franchise fees range typically between £35,000-45,000, with ongoing fees linked to things like revenues, training, marketing support or client acquisition.
Earnings can be significant, with Taxassist, for instance, assuring candidates that a turnover exceeding £300,000 is possible after five years, with exceptional performers surpassing £500,000.
Similar sectors include accountancy franchises, finance franchises and, more broadly, legal and finance franchises.