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.
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.