The City of London has called on the government to protect the financial services sector from the worst effects of Brexit, as new figures reveal the financial sector contributed £75.5bn ($99.3bn) in tax last year.
A PwC report, commissioned by the City of London Corporation, found financial services firms paid around 10.5% of all UK tax last year. The proportion of total tax and the total amount paid were broadly flat compared with 2018.
“Despite a challenging economic climate and uncertainty around Brexit, the sector has maintained its tax contributions from the record high of last year,” Catherine McGuinness, policy chair at the City of London Corporation, said in a statement.
“With Brexit looming, however, the UK must remain competitive to safeguard the sector’s employment base and significant tax contribution. The sector is vital to supporting prosperity right across the country. It will play a critical role in fuelling our economic success after we leave the European Union.”
Finance bosses are concerned that London will lose ground to rival hubs like Paris, Frankfurt, and Amsterdam after Britain officially leaves the European Union. Many firms are already choosing to locate new jobs elsewhere on the continent rather than in Britain.
The City wants UK prime minister Boris Johnson to ensure banks, asset managers, and insurers can maintain access to the EU’s single market after Brexit.
Britain is set to officially leave the European Union on 31 January and move on to trade negotiations with the EU. The topic of financial services access to the EU will be high on the agenda.
Financial services employs 1.1 million people in the UK, equivalent to about 3% of all employment.
Corporation tax across financial services fell for the first time since 2014, the report said, due to declining profitability. Finance still accounts for around a quarter of all corporation tax.