Shadow economy contributes to over 10% of UK GDP

Date

03 Jul 2017

Sections

Euro & Finance

Press release

The UK is expected to see a slow decline in its ‘shadow economy’—the production of and trade in legal goods and services that are deliberately concealed from public authorities - by 2025, according to a new study from ACCA (the Association of Chartered Certified Accountants).

Emerging from the shadows: the shadow economy to 2025 estimates the underground economy in the UK represented 11.5% of GDP in 2016– which would have totalled approximately £223 billion[1]. This is expected to fall slightly in the coming years, to 10.8% by 2025 – but remains a sizeable portion of the UK economy.

The global average is expected to fall from 22.5% to 21.39% of GDP over the same period.

‘The prevalence of shadow economy activity throws up considerable practical and ethical issues for both business and government,’ says Helen Brand OBE, chief executive of ACCA.

‘The UK has a relatively small shadow economy compared with other countries around the world, but it is quite worrying that by 2025 it won’t have fallen by much. The current factors contributing to the UK’s shadow economy are high unemployment and low GDP.

ACCA’s head of business insights, Faye Chua, says:

‘The shadow economy presents an enormous challenge for society and a huge potential opportunity for the profession to play an active role across the entire value chain from measurement and monitoring through to helping shadow firms and individuals manage their financial affairs and possibly make the transition from informal to formal.

‘Effective management of the underground economy requires action at all levels – government, cities, local communities and individuals.’

For more information, see Emerging from the shadows: the shadow economy to 2025

 

- ends –

For media enquiries, contact:

Chanel Townsend, ACCA Newsroom

E: chanel.townsend@accaglobal.com

T: +44 (0)20 7059 5077
M: + 44 (0)7753 242 464

Twitter @ACCANews

 

Notes to Editors

About ACCA

ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants. It offers business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management.

ACCA supports its 188,000 members and 480,000 students in 178 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. ACCA works through a network of 100 offices and centres and more than 7,110 Approved Employers worldwide, who provide high standards of employee learning and development. Through its public interest remit, ACCA promotes appropriate regulation of accounting and conducts relevant research to ensure accountancy continues to grow in reputation and influence.

Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability. It believes that accountants bring value to economies in all stages of development and seek to develop capacity in the profession and encourage the adoption of global standards. ACCA’s core values are aligned to the needs of employers in all sectors and it ensures that through its range of qualifications, it prepares accountants for business. ACCA seeks to open up the profession to people of all backgrounds and remove artificial barriers, innovating its qualifications and delivery to meet the diverse needs of trainee professionals and their employers. More information is here: www.accaglobal.com

 


[1] Estimated total worth of the shadow economy calculated as estimated 2016 GDP (according to IMF World Economic Outlook database current at April 2017) multiplied by estimated 2016 shadow economy as proportion of GDP.

 

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