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Two of Scotland's biggest accountancy firms, Scott-Moncrieff and Campbell Dallas, are to merge and become part of a much larger international network.

Together, the companies will have 45 partners and more than 500 staff in Scotland. When combined, their recent fee income comes to £40m.

The merger will take effect from 3 May and they will operate out of 11 offices, from Inverness to Ayr.

It is understood the two operations will retain their current branding.

Digital shift

In October 2017, Campbell Dallas became part of the Cogital Group international accountancy firm, allied to the Baldwins and Blick Rothenberg brands in England.

London-headquartered Cogital was founded in 2016, with acquisition of two UK firms and a Nordic one, and has expanded rapidly.

It aims to specialise in business support and outsourcing of business processes for private firms.

Such consolidation reflects the value of scale in the technology now required for accountancy and professional services, particularly as HMRC shifts to digital filing of company returns.

Scott-Moncrieff claims to be Scotland's longest-established accountancy firm, with one client that has been with the firm since 1792.

It has 16 partners and 220 staff, and specialises in public sector and charity clients, as well as manufacturing and financial services. It has offices in Edinburgh, Glasgow and Inverness, and it is an adviser to Audit Scotland.

Campbell Dallas is bigger with more than 300 staff, working in offices in Aberdeen, Ayr, Edinburgh, Glasgow, Kilmarnock, Perth and Stirling.

It claims to have strongest expertise in family business clients, as well as rural, healthcare, food, brewing, distilling and construction.

'Largest VAT team in Scotland'

Stewart MacDonald, managing partner at Scott-Moncrieff, said the deal - with no valuation being disclosed - is "an exciting opportunity for clients and our people".

He said: "CogitalGroup leads the industry in using technology to deliver cutting edge services to clients, with the ability to adapt quickly to changing client needs.

Chris Horne, managing partner of Campbell Dallas, said: "The combined business will have the largest VAT team in Scotland and provides us access to specialist services in areas such as IT strategy and cyber security".

He added: "We continue to build a progressive and disruptive business in the fast-changing accountancy market".