The Big Four firm said its revenues in the UK rose from £1.958m in 2015 to £2.068m, but its profits fell 2% and its average partner pay was reduced from £623,000 to £582,000.
The UK chairman Simon Collins was paid £1.8m, down from £2.2m last year.
KPMG said that its profits were hit by investments "made to adapt to the market".
It also changed its partner mix by investing in external hires with skills in emerging services. It made 40 internal promotions and accelerated the retirement of a number of partners, leading to the reduction in pay.
In 2016, KPMG secured the audits of companies like John Lewis, Standard Life, Balfour Beatty and Wood Group. Its management consulting team also won the Civil Service Learning contract.
The firm said all its divisions grew this year apart from its risk consulting business, which saw large bank remediation projects close.
KPMG said that total tax payable to HMRC was £790m.
Collins said that audit tendering activity in 2016 was the busiest year for the FTSE 350 since the trend began in 2013, encouraged by regulatory reform.
“Throughout this busy year of tendering, we have won some fantastic work, maintained a FTSE 350 share of 28% and continue to be the largest auditor of listed businesses overall.
“We are investing substantially in audit quality, in particular in technology where we are working with IBM Watson on artificial intelligence tools and McLaren Applied Technologies on predictive analytics,” the chairman added.
The firm received 28,000 applications for 1,200 graduate and apprenticeship places this year, and created 1,500 new jobs, taking the total number of employees to 13,000.
Looking ahead, Collins said, “We are living in uncertain times – with our clients considering what a break from the EU will look like and the impact of Trump’s presidency, set against continued themes of wider geopolitical unrest and terrorism.
“I think our investment in the firm overall and the changes we’ve made to our operations have transformed our agility. I’m confident that we’re well positioned for the next year and beyond.”
On Tuesday, KPMG announced its global results, with revenues of $25.42bn (£20.02bn), a rise of 8% on 2015.