The UK’s accounting and legal firms made a total tax contribution of £19.1bn in 2018, up 6.8% from 2016 for those firms studied, according to the latest report from private-sector membership body TheCityUK.
The report revealed the total tax contributed by the two sectors makes up 2.8% of total UK tax receipts, equivalent to over half the total UK government transport budget. This comprises of taxes borne (£8.3bn) and taxes collected (£10.8bn).
Currently, for every £100 of turnover, UK legal and accounting firms contribute £38.40 in taxes.
TheCityUK found that the two sectors’ overall growth has outpaced wider UK economic growth in every year since 2010, with legal and accounting Gross Value Added (GVA) growing by 58% compared to 35% for wider UK GVA. It said this has resulted in the industry making up a “greater proportion” of the total UK economy in terms of GVA, up from 2.4% in 2010 to 2.7% in 2018.
In total, 743,000 people are employed by the UK’s legal and accounting sectors, representing 2.4% of the total UK workforce. EU statistics also show that the UK has the largest number of people working in the legal and accounting sector of any EU country, with employees in the UK representing 23.5% of the total number of legal and accounting employees in the EU.
Anjalika Bardalai, chief economist and head of research, TheCityUK, said: “Legal and accounting firms are a key part of the UK’s world-leading financial and related professional services ecosystem.
“The expertise and experience they embody help to make the UK an attractive and competitive place to do business, serving as an important part of the mix which draws investment and jobs to the UK.
She added: “They also make a substantial contribution in the form of high-quality jobs, and from taxes which help to pay for the public services which make the UK an attractive place to live and work.”