Finance firms 'contributing more in tax'

The amount of tax financial services firms contribute to the government's coffers has increased, with the sector paying some £65 billion in taxes over the 2012-13 financial year, according to research by PwC and the City of London corporation.

This marks a £2 billion increase from the previous year and ensures the industry now contributes roughly one-tenth of all taxation revenues, underlining how important it is to the UK economy as a whole.

As well as providing further evidence of the economic recovery being enjoyed by the country as it emerged from a difficult recessionary period, these figures will also reinforce doubts over the government's plans to refocus its taxation regime.

In an attempt to reduce its reliance on financial services, the coalition is keen to rebalance the economy towards manufacturing and the regions, according to recent reports.

However, these figures underline the role that finance can play in helping revive the UK's fortunes, particularly given its international status as a hub for businesses from across the globe.

Mark Boleat, policy chairman at the City of London Corporation, said the results demonstrated how much the industry has to contribute.

"The success of this sector is integral to the country's future prosperity and this should not be forgotten in the wake of understandable anger over recent controversies," he added.

Although concerns did exist that the City would begin to play less of a role in the British economy following the financial crisis, this has not proven to be the case as the sector continues to go from strength to strength.

This study follows a report from TheCityUK, an advocacy group for London's financial services sector, highlighting the fact that confidence is extremely high among businesses in the area.

Chris Cummings, chief executive officer of the group, said: "The optimism is what now stands out. Quiet, cautious, but growing confidence. Looking to the year ahead we see more good than bad news and that's due to feed through in employment and initial public offerings."