UK financial and related professional services make record tax contribution

21 May 2024
  • Record £110.2bn in taxes contributed by financial and related professional services – enough to fund the government’s annual education budget
  • The industry’s Total Tax Contribution represented 12.3% of all tax receipts in 2023

A new study reveals that in 2023, the UK-based financial and related professional services industry contributed a record £110.2bn in taxes – a contribution of approximately £1,643 per individual in the UK that goes towards government services provision. This represents 12.3% of all UK tax receipts for the year, enough to fully fund the UK government’s annual education budget, underscoring the industry’s significant fiscal contribution to the UK economy. 

The Total Tax Contribution of UK-based financial and related professional services’ report, conducted by PwC and commissioned by TheCityUK and the City of London Corporation, is the first ever Total Tax Contribution (TTC) study for financial and related professional services industry. The analysis shows that between 2016 and 2023, the TTC rose by over a quarter, increasing by £23.3bn. The financial services sector alone contributed an estimated £79.3bn and the related professional services sector added £30.9bn. These are the highest recorded contributions for both sectors.  

Employment taxes were the largest component of the industry’s TTC, contributing £55.1bn, or 14% of all employment taxes received by the UK government in the year ending 31 March 2023. The average tax paid per employee in the industry was estimated to be around £30,500, significantly higher than the national average of £11,866, highlighting the industry’s vital role in providing high-skill, high-wage jobs.

The financial services sector paid £18.4bn in corporation tax, inclusive of the bank surcharge and levy, making it the largest contributor to UK corporation tax receipts. The professional, scientific and technical services sector, which includes legal, accounting and management consulting services, contributed £6bn or 7% of the total corporation tax receipts, underlining the importance of these sectors to the economy.  

Miles Celic, Chief Executive Officer, TheCityUK, said, "Financial and related professional services are a significant and consistent source of tax revenue for the government. This is underlined by the industry’s latest record contribution of more than £110bn being enough to fully fund the government’s annual education budget. It is critical that the government prioritises creating a tax environment that is stable, predictable, and competitive to maintain and strengthen the UK’s position as a world class destination for investment and business growth.”

Chris Hayward, Policy Chairman, the City of London Corporation, said, “These latest figures showcase, once again, how the UK financial and professional services sector is an engine for growth. It’s vital that we continue to support the sector. The UK needs a robust and interconnected financial and professional services strategy that will bring public and private sectors together to enact a bold global ambition, provide clarity to business and drive economic growth across the UK.

“Our approach to international trade also needs rebalancing. The UK is the second largest services exporter in the world, so let’s focus on where we excel. Creating a global network of agreements focused on data, digital and professional qualifications will spur trade and spur economic growth.”

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