Tax – UK Finance Labour Market Trends Report
Tax market turns after strong growth, clear shift from expansion to stabilisation
Key findings include:
- Tax hiring is set to fall by around 10% in 2026 after a 19% surge in 2025, marking a clear shift from expansion to stabilisation
- London’s share of demand rises from just under 40% to around 43% as regional hiring drops by roughly 15%
- Core tax roles still account for close to 60% of hiring, while Employment Tax surges by 160% then a further 78%
- Professional Services holds around 65% of demand, while Financial Services falls from roughly 15% to 10%
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Hiring slows as London regains control
The UK tax labour market is entering a correction phase after a sharp expansion in 2025. Vacancies rose by around 19% last year, but are now projected to decline by roughly 10% in 2026, pointing to stabilisation rather than contraction. The slowdown is being driven outside London. Regional markets, which grew by approximately 22% in 2025, are now expected to fall by close to 15%, while London dips by only around 2% after a 14% increase. This divergence is shifting the balance of demand back towards the capital, with its share rising to around 43%. Short-term indicators reinforce the shift. Q1 growth of roughly 14% has reversed into a 7% decline, while January’s 63% surge has softened into a 7% drop, signalling a clear loss of pace.
Core tax roles hold firm as specialists diverge
Hiring remains heavily concentrated in core tax roles, which grew by around 18% in 2025 before easing by roughly 11% in 2026, yet still account for just under 60% of total demand. Within specialist areas, the divergence is more pronounced. Corporate Tax rose by approximately 35% before falling by around 26%, indicating a cyclical spike rather than sustained growth. Indirect Tax, however, is continuing to expand, rising by around 30% in 2025 and a further 10% into 2026, increasing its share to roughly 10%. Employment Tax is accelerating fastest, jumping by around 160% and then a further 78%, albeit from a low base. In contrast, Tax Advisory is declining, with a 5% drop followed by a further 8% fall, showing reduced appetite for non-essential functions.
Professional Services drives market direction
Professional Services continues to dominate tax hiring, accounting for close to 70% of vacancies at its peak in 2025 before easing back to around 65% in 2026. Growth of roughly 27% last year has been followed by a 16% decline, closely mirroring national trends and confirming its role as the primary driver of demand. Financial Services is moving in the opposite direction, with hiring falling by around 17% in 2025 and a further 10% in 2026, reducing its share from approximately 15% to 10%. Elsewhere, expansion is more fragmented. Consumer Goods & Services rose by around 42% and is expected to grow by a further 6%, while Industrials surged by roughly 150% before adding another 10%. Despite this, both remain relatively small contributors, limiting their overall market impact.
Firms shift from expansion to precision hiring
Hiring strategies across leading firms are diverging following the 2025 peak. KPMG, the largest employer, increased hiring by around 32% before reducing activity by roughly 13%, indicating a move away from volume recruitment. PwC shows a sharper cycle, with a 45% decline followed by a projected 30% rebound, reflecting a pause and reset approach. Deloitte is expanding aggressively, with growth exceeding 200% and a further 68% increase expected, signalling a sustained build-out. EY follows a similar but more moderate pattern. Among mid-tier firms, volatility is more pronounced. BDO declined by around 11%, while MHA and Francis Clark experienced sharp growth in 2025 followed by notable pullbacks. The shift is clear, hiring is becoming more targeted, with firms prioritising specific capabilities over scale.
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