PwC has carried out a study on behalf of CityUK to determine how much tax is paid by the accounting and legal professions and how much tax they collect on behalf of government. Total tax contribution study for UK legal and accounting activities.
PwC has carried out its own studies for nearly 15 years into the total tax contribution of the 100 Group, representing the largest UK companies. For the past nine years it has carried out equivalent studies into the financial services sector and for the past couple of years into the banks on behalf of the British Banking Association which, from 1 July 2017, has become part of UK Finance. Ian Young wrote a piece about the three latest, 2016, reports which was published in the February 2017 edition of TAXline.
The total tax contribution covers the taxes borne by the companies and sectors covered, which includes corporation tax for companies as well as employers’ national insurance contributions, business rates and irrecoverable VAT. The taxes collected on behalf of government include fuel duties, PAYE and VAT.
In relation to the latest survey there were 60,470 legal and accounting firms in the UK employing 693,000 people. This is 2.2% of total UK employees.
Fifteen of the very largest firms participated in this latest study and the detailed information they provided in relation to their own circumstances has been extrapolated to the total population of such firms using ONS data.
The taxes borne by the accounting and legal services firms are £6.4bn while the taxes collected are £9.1bn a total tax contribution of £15.5bn.