There are many UK Accountancy practices for sale. I am looking to buy
a practice with approximately £300,000- £400,000 of annual fees. I am
not sure how to value the purchase and how the purchase value should
be paid e.g. upfront or spread out depending on performance. I think
there is a standard industry formula used buy I can't find it. Can you
help?

The easiest way is to check out some of the practices that are offered
for sale and ask them how they have got at the price.

Having thought about this for ten minutes, I suspect that you wish to
buy a 'business' for somebody other than yourself.

Geographical location would be important.

Valuation is both easy and difficult
Because you are dealing with accountants 'nett assets' will really be
'nett liabilities'
- like a Lease is an 'asset' in the balance sheet, and is really a complete PITA

With that size practice most of the business is likely to depend on a
few key people, and when they go it is likely that the business will
drift off.

If my hunch that you are trying to 'sort out the new son-in-law' is
correct (which I consider an admirable and generous action) then I
would look at buying into an existing practice, in the right location,
and with a client base that you understand and know.

Realistically 'good things' are seldom sold on the open market, most
deals take place behind closed doors, between people who know and
(slightly dis-)trust each other.

I reckon that if you were CA or ACCA yourself, you would not have
needed to ask this question since the answer is simple, but the
figures that fit into the formula are opaque.

My recommendation would be to buy the lad into a junior partnership
with a firm that you know or reliable friends of yours know.
If the lad is really good he will either swan off with all the best
clients, or be begging you to cough up to buy off the widow of a
senior partner when the opportunity arises.

In the US, there are firms that operate as brokers dealing with this
kind of thing. There are also books about how to value accounting
practices. You might be able to gain some ideas through these.
Although it is US specific, one website for a broker is as follows and
maybe you can get some ideas to help:

http://www.accountingpracticesales.com/?source=overture

Hope this helps.

Thanks very much to all of you who have added comments!

Regards