The Total Tax Contribution of UK-based financial and related professional services

This is the first-ever Total Tax Contribution (TTC) study for the financial and related professional services industry, conducted by PwC for the City of London Corporation and TheCityUK. The study gathers comprehensive data on all business taxes borne and collected by firms engaged in financial and related professional services. Official, publicly available tax data by industry exist mainly for corporation tax, but looking at all taxes is vital to enhance the understanding of the full contribution the industry makes to the broader economy. In particular, the analysis highlights the importance of jobs generated by the industry and the significant contribution it makes through employment taxes.

The financial and related professional services industry is at the heart of the UK economy. This research has shown that it makes a significant contribution of an estimated £110.2bn to the UK public finances. This is the highest estimated tax contribution for the industry in the history of our TTC studies. The study has also shown that the industry’s contribution through jobs and employment taxes in particular is a significant and consistent source of tax receipts for the government.

The economic importance of the industry is also shown through its corporation tax payments. HMRC data show that the financial services sector, inclusive of the bank levy and bank surcharge, contributed £18.4bn to UK corporation tax receipts in the year to March 2023, the largest contributor of any sector in the UK. The financial and related professional services industry also pays other taxes beyond corporation tax, but these often receive less visibility.

The UK’s competitiveness will be enhanced by a focus on supporting economic growth, and attracting the investment needed to facilitate this. The financial and related professional services industry will continue to have a core role to play in supporting long-term economic growth by facilitating investment, as well as through its direct contribution to employment and the public finances.