UK legal services prove immune to pandemic

Despite the ravages of the global pandemic, the continuing health of the UK's legal and accounting sectors is reflected in the latest report from the financial services trade body, TheCityUK.

David Sapsted

19 October 2021

The report - 'Total Tax Contribution Study for UK Legal and Accounting Activities’ - showed that the two sectors contributed £20.5 billion in tax last year, a 5.4% increase on 2018.According to TheCityUK, the growth of these sectors over the past decade had consistently outpaced the overall economic growth, with legal and accounting Gross Value Added (GVA) up by 27.8% compared to 5.3% for the wider UK economy between 2011-2020.

Legal and accounting: high-value jobs across the UK

Anjalika Bardalai, chief economist and head of research at TheCityUK, said: "Legal and accounting activities are a key part of the UK’s world-leading financial and related professional services ecosystem, and a source of high-value jobs right across the UK.“This report highlights the continued and increasing fiscal contribution the legal and accounting sectors make to the UK. This contribution has become even more striking in light of the economic damage wrought by the Covid-19 pandemic."The relative resilience of the legal and accounting sub-sector make it well-placed to make a strong contribution to the UK’s post-pandemic economic recovery.”

Sustained level of investment in graduate recruitment

The report showed that 755,800 people are employed by the two sectors, accounting for 2.3% of the total UK workforce."Despite the pandemic, there was a sustained level of investment in graduate recruitment with 13 out of the 15 study participants that provided additional data related to Covid-19 maintained their originally intended recruitment levels in 2020," said TheCityUK."UK-based Legal and accounting activities form key part of the ecosystem which underpins the UK’s status as global financial centre."Together with financial services, the industry contributed an estimated £96.1 billion in tax in 2020, 12.9% of total UK tax receipts, while making up 10% of total UK economic activity. This underlines the disproportionate positive contribution the industry makes to the UK’s capacity to pay for key public services."The report said that the tax contribution of the legal and accounting sectors last year was equivalent to the combined capital spending budgets of the Departments of Health, Education, Housing, and Communities & Local Government.