Law and accountancy firms generating 2.5 per cent of UK taxes

The UK-based legal and accountancy sector generated an estimated £15.5 billion in tax in 2015/16 – comprised of taxes borne (£6.4 billion) and taxes collected (£9.1 billion) – representing 2.5 per cent of all UK tax receipts.

According to the report, ‘Total Tax Contribution Study for UK legal and accounting activities’, produced by PwC for Square Mile lobbying group The City UK, is the first such study to cover legal and accounting activities and highlights the importance of these activities to the UK economy.

It shows the sector collectively generated employment of 693,000 across the UK – nearly one quarter (23 per cent) 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 per cent of the EU’s total sector jobs, then France (10 per cent), Spain (8 per cent) and Italy (7 per cent).

Added together with the significant total tax contribution for the financial services sector, reported as £71.4 billion in 2015/16, the estimated total tax contribution for UK-based financial, legal and accountancy services is £87 billion.

Miles Celic, chief executive of The City UK, 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 per cent of all firms.