PwC revenues reach record £3.1bn as firm stresses contribution to UK plc

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PwC, the professional services firm criticised earlier this year by MPs for selling “tax avoidance schemes on an industrial scale”, has said the company and its staff contributed £1.1bn in tax to the exchequer last year.

In its latest annual report, PwC said revenues for the year reached a record £3.1bn, with profits up 6% to £818m. The firm also sought to highlight its contribution to the UK economy, which it put at £4.22bn in terms of creating jobs, developing skills, generating growth and other benefits.

During the year, the group hired 4,100 people in the UK, including more than 1,500 graduates and school leavers, and received more than 100,000 job applications, according to the report, published for the first time only in digital form.

PwC’s profits are distributed to partners, around 885 in total, each of whom pay tax on their profits at an effective tax rate of 48%. The partners’ average profit increased from £722,000 to £740,000, upon which tax is paid. The £1.1bn payment to the Treasury includes tax paid by PwC’s other employees as well as partners.

Ian Powell, who is coming to the end of his eight-year two-term stint as chairman and senior partner, said: “We’ve advised firms on their total tax contributions and felt it was appropriate to report on the same basis.”

MPs criticised PwC in February for helping clients to make use of a legal tax loophole that enabled them to minimise tax payments by diverting profits to tax havens such as Luxembourg. PwC said it disagreed with the findings of the public accounts committee report, adding that the UK tax system was “too complex”.

Powell said each of the firm’s four business sectors delivered good growth, with assurance fees up 9% at £1.1bn, tax advice up by 7% at £763m, work on deals by 8% at £628m, while consultancy work grew by 16% to £571m.

Powell said he was proud that the firm had held its nerve after the financial crisis and was now beginning to reap the benefits from that strategy. “We held our nerve and continued to invest in the business. We didn’t make short-term profit-focused decisions but went for a medium- and long-term strategy.”

The digital report features an interview with Powell by the journalist and BBC Proms presenter Katie Derham while other members of the executive team give presentations. There are some interactive aspects too. “Evolving how we communicate with our people, clients, regulators and society is important to our future success as a professional services business in a digital age,” Powell said.

He said his biggest regret as head of the firm was not doing better in achieving greater diversity, of both gender and ethnicity. “We have made really good progress on diversity but it’s not good enough ... We are building in more metrics to make people more accountable.

“If PwC is to stay relevant in the next 10-15 years, we need to continue to reflect society. We’ve made great strides over the past 12 months to improve social mobility in terms of the people that get access to the firm, but we want to become even more diverse and inclusive.”

Powell said the firm was committed to building trust and being a progressive employer.

On the question of whether Britain should leave Europe, Powell argues for continued membership within a reformed Europe. “Being part of as large a trading bloc as you can is positive but only if it is reformed ... I think Europe does need reform.”

Powered by Guardian.co.ukThis article was written by David Hellier, for theguardian.com on Monday 14th September 2015 10.44 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010

 

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