Recent research has found that legal and accountancy businesses in the UK generated £15.5 billion for the Treasury in 2015/16, including £6.4 billion in taxes immediately borne by businesses and £9.1 billion in related taxes.
The total amounted to two and a half per cent of receipts in the UK in the year to the end of June 2016, which equates roughly to the police service spending budget for the same period.
Meanwhile, the financial service’s tax contribution was £71.4 billion over the same period, making the estimated total combined tax contribution of the legal, accountancy and financial sectors £87 billion.
The study, which used data that would not ordinarily be made public in financial statements, was the first to cover legal and accounting activities and it highlights the importance of these activities to the UK economy.
In addition, as one commentator pointed out, the expertise in these combined sectors is not just located in London but across the UK, including cities such as Manchester, Bristol and Edinburgh.
He added that this is why it is unlikely that other centres around Europe will take on work currently done in the City after Brexit, as they rarely have the same depth of infrastructure.
However, because work for the biggest legal and accountancy firms is closely linked to activity in the financial services sector, the City is watching closely for signs of the impact on areas such as mergers and acquisitions or international trade when the UK finally leaves the European Union.
