Research carried out by PwC for TheCityUK revealed the significant contribution to the UK economy made by the legal and accountancy sector.
The report showed that the sector generated an estimated £15.5bn in tax in 2015/2016, which comprises of £6.4bn of taxes borne and £9.1bn taxes collected. This contribution makes up 2.5% of all UK tax receipts – approximately the cost of total UK spending on police services.
Meanwhile, the financial services sector’s tax contribution was revealed to be £71.4bn in 2015/2016, making the estimated total combined tax contribution of the accountancy, legal and financial sectors £87bn.
In 2016 there were 60,470 legal and accounting firms in the UK. Of these, firms where the number of employees was under 99 made up 99% of all enterprises.
Looking at employment figures, the report revealed 2.2% of UK labour force are legal and accounting employees, and employment taxes in this sector came to £5bn.
The average wage per employee of the respondents, who were generally from larger firms, was £61,176, and the average contribution to the public finances for each employee was £22,463.
This report is the first of its kind in quantifying the overall contribution of this sector, and PwC utilised data that would not ordinarily be made public in financial statements.
Miles Celic, chief executive officer of TheCityUK, commented: “This is the first such study to cover legal and accounting activities and it highlights the importance of these activities to the UK economy.”
He 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.”
Large firms have also recently released reports on their gender pay gaps, with PwC’s at 13.7% and Deloitte’s at 18.2%.