Tax contribution of UK accountancy sector revealed
The UK legal and accountancy sector contributed an estimated £15.5bn to public finances in 2015/16, a new report has revealed.
A report released today by TheCityUK and produced by PwC has estimated that the overall tax contribution made across the accounting and legal sectors in the UK represents around 2.5% of all UK tax receipts.
Out of the £15.5bn figure, £6.4bn comprised of borne taxes which include Partner Tax, corporation tax, employers’ national insurance contribution (NIC) and business rates.
The remaining £9.1bn is made up of taxes collected which include employee income tax and NIC, and VAT charged through customers.
Miles Celic, Chief Executive Officer, 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.”
Accounting in numbers
The report found that 693,000 people are currently employed in the UK legal and accounting sectors, across 60,470 firms, making up 2.2% of the UK workforce.
The UK also has the largest number of employees in these sectors within the EU, representing 23.3% of the bloc’s total.
Germany follows the UK with 21% and France has the third highest number of employees in the sectors making up 10.3% of the EU total.
By collating figures from the largest firms that took part in the study, PwC found that the average wage per employee was £61,176 which yields an average of £22,463 in tax.
For the smaller firms, the average wage was estimated to be £25,642 with £6,332 being contributed towards public finances.
Miles added: “Factors such as the vote to leave the EU, the accelerating pace of technological and demographic change are transforming the financial and related professional services ecosystem.
“In this context, the data generated by this study, which highlights the contribution made by the legal and accounting activities sector to the UK public finances, will be an important contribution to informing public policy decisions.”