EY’s UK business today posted record revenues of more than £3.2bn as partners at the Big Four firm prepare to vote on plans for a global split.
The UK business’ revenues increased 17.2 per cent as the accountancy firm’s fee incomes were bolstered by a 33 per cent uptick in consulting revenues.
A 15 per cent increase in revenues from EY’s tax business and a 10 per cent rise in its strategy and transactions business also bolstered the firm’s fee incomes as revenues from EY’s assurance business – which covers its audit, accounting, and forensic and integrity services divisions – increased 11 per cent.
The uptick saw partners at EY’s UK business see their pay jump seven per cent to £803,000 for the past financial year, compared to £749,000 in the financial year 2021.
The £803,000 payouts come after partners at EY’s Big Four rivals, PwC and Deloitte, received pay packets worth more than £1m each on the back of surging consultancy revenues.
The results come as EY pushes forwards with plans for a global split that would see it separate its advisory arm from its audit business.
The separation plans seek to free EY’s consulting business from the conflicts-of-interest rules that block it from selling advice to its audit clients.
EY’s UK chair Hywel Ball said “the strategic rationale for our separation into two leading businesses is compelling.”
“The environment we operate in is changing rapidly and it’s important that we continue to adapt to ensure that we maintain our strong sustainable growth and meet the needs of all our stakeholders,” Ball said.
However, critics of EY’s global separation plans have argued the split could see the firm’s slower-growing audit business struggle to recruit and retain talent.
City University accounting professor Atul Shah warned the split could in turn undermine audit quality in limiting the assurance business’ access to talent.
The warning comes after EY in June set out plans to invest $1bn (£870m) in bolstering the quality of its audits through uptake of new technology, in the wake of a series of major accounting scandals, including around EY’s audit of German payments processor Wirecard.
In seeking to improve its audit quality, EY’s UK arm has over the past year hired 1,232 new auditors, as part of a hiring spree that has seen it take on board more than 5,500 new staff in the financial year 2022 alone.
EY has als invested more than £106m in boosting staff salaries having also increased the size of its staff bonus pot by 55 per cent to £110m, as the battle for talent continues to push up salaries in the UK’s professional services sector.
“The long-term investments we’ve made in our business means that we are well positioned to take on a project of such complexity, whilst also navigating the current period of economic uncertainty facing the UK as a whole,” Ball said.