Research from Oxford Economics, which compiled the report, finds that the profession provides “crucial services” to the UK economy, through the collection, analysis and reporting of financial information which in turn underpins business decision-making and administration at all levels.
“Professionals who are proficient in this ‘language of business’ are a necessary ingredient of economic activity,” the economists conclude.
The accounting services sector itself accounted for £17.2bn of the total £52bn, with the rest coming from inhouse accountants. This is equivalent to 3% of all activity and almost half (49%) of the output produced by the construction sector.
In 2016, some 598,600 professionals were employed in accounting, book-keeping and audit roles; in addition, the accounting industry filled 242,800 jobs in non-accountancy roles, such as administration, management, IT and other support roles. In other words, the accountancy profession directly supported the employment of 841,000 people.
Of the inhouse accountants, around 70,000 were employed in public administration, education and health, while a similar number were employed in manufacturing.
Not surprisingly, the Treasury is a significant beneficiary of the sector’s huge earnings. Last year, it received approximately £5.8bn in tax revenues, including income tax and NICs, corporation tax, VAT and business rates. A further £4.1bn was generated through the employment of inhouse accountants, bring the total tax revenues to £9.9bn.
This is equivalent to 1.8% - or £1 in every £56 – of HMRC’s total tax receipts during 2016.
The research also shows that the B2B market for accountancy services was worth some £17.1bn in 2016, or 1.1% of all B2B purchases in the UK economy in 2016. The biggest buyer of accountancy services was the finance industry which spent £2.7bn, but the engineering and legal sectors were also keen purchasers, spending 7.3% of their annual B2B budget.
The overall accountancy market is growing quickly and incomes among the top 100 firms in the UK rose by 7.3% in 2016 compared to a year earlier. Although demand domestically is strong, interest overseas in UK accounting services has boosted export growth by 59% over the past five years.
In 2016, UK accounting services exports amounted to £1.8bn, compared to imports of accounting services which were valued at £850m.
“This means that accountancy activities help provide a positive boost to the UK’s trade balance,” the economists say.
It also emphasises the UK’s status as a global leader in accounting activities.