Big Opportunities for Tax & Bookkeeping Professionals

Evelyn Jacks

Things have also gotten a lot more complex since taxes were first introduced in 1917.  Back then the tax return was six pages long and contained 23 lines. By contrast, the 2019 federal T1 featured an expanded 8-page return, 11 schedules and hundreds of lines. This complexity and digitization been a boon for tax accounting and bookkeeping services, which have grown exponentially, too.  Entry into these high demand and highly rewarding professions makes good sense, an dnew statistics about the size of the market confirm this good news.

Number of firms in the tax, accounting, payroll and bookkeeping services.  It is estimated by Statistics Canada that there were 53,102 firms working in this industry in 2019;  the vast majority, 63%, did not have any employees.  Of those who did, 74.1% were considered to be micro-businesses, employing less than 5 employees.  25.3% are considered to be small businesses which employ 5 to 99 people. Here are the statistics published by Statistics Canada in 2019:

Market Share.  These firms prepared over 17 million tax returns for the 2019 tax year; based on statistics from CRA for returns received from Feb 10, 2020 to November 1, 2020.  A multi-billion dollar industry, that’s 57.1% of all tax returns filed in Canada, a total of 30,259,400.

NETFILE, largely do-it-yourself electronic tax filers, filed 32.8% of all returns, 9.9 Million.  There is potential to serve some of that market with the emergence of tax reforms, tax complexity or higher taxes on the horizon.

Just 9.9% or 3,009,246 tax returns were filed on paper; 69,517 or 0.2% of filers used the telephone  service called File My Return.

The Fraser Institute estimates that the average Canadian spends between $500 and $700 on tax compliance annually, making this a multi-billion industry.

Tax Filing Profiles.  About two thirds of Canadians received refunds this year, averaging $1848.  Those who had a balance due numbered just over 6 million, with an average balance due of $6293.  There are just over 4 Million Canadians who file a nil return in order to collect benefits.

Opportunities in the tax, accounting, payroll and bookkeeping services.  The demand for more tax intermediaries to help with Canadians’ tax filing has grown due to complexity, as well as CRA’s successful drive to electronic filing. 

The big opportunities however, are in working with business owners.   Consider these statistics on all revenues earned in this sector:

• 70.2% Business Sector
• 15.5% Individuals & Households
• 8.3% Government, Non-Profits, Public Inst
• 5.9% Clients Outside of Canada

In 2018, for the first time, taxation preparation and representation services generated more sales for this industry sector than auditing and other assurance services. Despite this, taxation services' share of overall sales fell slightly from 28.2% in 2017 to 27.8% in 2018.

Auditing and other assurance services, the second largest source of sales, generated 26.9% of all sales in 2018, down from a high of 32.1% in 2014. Close behind were bookkeeping, financial statement compilation and payroll services, which added 26.3% of total sales in 2018.

Knowledge Bureau is pleased to provide the industry training for new entrants to enter this marketplace either as employees in established firms or as entrepreneurs who wish to open their own firms and employ others.  These comprehensive, training programs are written by experienced industry experts and delivered in a flexible online format leading to professional certification, diploma and designation standing.