A new report published today by TheCityUK reveals the considerable contribution the UK-based legal and accountancy sector makes to the UK’s public finances.
In 2015/16 the UK-based legal and accountancy sector generated an estimated £15.5bn in tax – comprised of taxes borne (£6.4bn) and taxes collected (£9.1bn) – representing 2.5% of all UK tax receipts. This is roughly equivalent to total UK spending on police services. The report underlines Britain’s leading position in Europe as a legal and accounting hub.
According to the report, ‘Total Tax Contribution Study for UK legal and accounting activities’, which was produced by PwC, the sector collectively generated employment of 693,000 across the UK – nearly one quarter (23%) of EU employees in the sector are in the UK. Britain’s premier position as a legal and accounting services employer is trailed by Germany at 21% of the EU’s total sector jobs, then France (10%), Spain (8%) and Italy (7%).
Added together with the significant total tax contribution for the financial services sector, reported as £71.4bn in 2015/16, the estimated total tax contribution for UK-based financial, legal and accountancy services is £87bn.
Miles Celic, Chief Executive, TheCityUK, said,
The legal and accounting sector make a considerable contribution to the UK economy in their own right, and are an essential part of the world-leading financial and professional services ecosystem.
The UK is the leading global hub for legal and accounting expertise and it is vital that we not only preserve that, but we continue to grow it. This expertise isn’t just located in London. Right across the UK, centres of excellence, including Manchester, Bristol and Edinburgh, are adding value to the UK economy. These are also the areas we expect to see the most growth in the coming years as we move through Brexit and beyond.
In 2016, there were nearly 60,500 legal and accounting businesses in the UK with small to medium sized enterprises with fewer than 99 employees making up 99% of all firms.
The report from TheCityUK and PwC is the first such study to cover legal and accounting activities and highlights the importance of these activities to the UK economy.