EY UK has reported robust growth in its tax revenues for the financial year ending June 30, 2023. The firm stated that it achieved strong growth across all its service lines in the UK, with an increase of 20% in tax revenues. Additionally, consulting saw an 18% increase, assurance rose by 17%, and strategy and transactions grew by 8%. EY UK's tax and legal division reported significant growth in its tax compliance business, while its law and cross-border services business also saw double-digit growth.
Hywel Ball, EY UK's chair, attributed the revenue growth to strong client demand, particularly in areas such as technology consulting, tax, and audit. He noted that companies are turning to EY for expertise as they undergo business transformations in response to the evolving economic and regulatory environment and rapidly emerging technologies.
The increased demand for tax advice on regulatory changes, including BEPS 2.0, was a contributing factor to the growth in revenue. Companies are seeking guidance on changes to the taxation of international companies' profits and are outsourcing parts of their tax functions.
In terms of financial performance, EY UK reported a record revenue of £3.76 billion ($4.56 billion), representing a 16% increase from the previous year's £3.23 billion. The firm added 267 partners to its UK business, bringing the total to 1,701 partners. However, the increase in partner headcount resulted in a 5% drop in average partner profits, which fell from £803,000 to £761,000. EY explained that the profit decrease was due to reinvesting profits into the business.
EY UK also reported that its tax contribution for the 2023 financial year represented over £1.27 billion. These results follow EY's global tax services revenue of $12.1 billion for the financial year ending June 30, 2023, marking a 7.5% increase from the previous year.
EY highlighted that the increased demand for advice on regulatory changes, combined with growth in various service lines, has contributed to its strong financial performance in the UK and globally.
By fLEXI tEAM