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KPMG chiefs' pay soars thanks to 27% profit boom

The 583 UK partners of "big four" accountancy giant KPMG enjoyed a 23% rise in average pay last year to £713,000.

It came on the back of a 27% increase in UK profits to £455 million for the firm ranked fourth in the sector by global turnover.

KPMG's overall UK revenues were virtually static at £1.8 billion, but chairman Simon Collins said the jump in profitability "boosts us from fourth to second of our peer group".

In Scotland, the opening of a new centre for tax excellence in Glasgow created 65 new jobs and helped boost KPMG's total head-count to 706.

Craig Anderson, senior partner in Scotland, said the centre, which handles KPMG's corporate, personal and expatriate tax business, had been "a real coup for the city" with staffing already up to 103 from a standing start in July.

"We intend to grow that to 180," he said. On the chancellor's latest broadside against tax avoidance, Mr Anderson said: "There is no doubt that there is less appetite to look at tax planning, particularly amongst listed or public entities, which people could in some way point to - it is almost considered distasteful."

Although every taxpayer had the right to "minimise their tax liabilities within the law", the view of the law had become blurred, and "people are now generally more conservative".

But he added: "Compliance and regulation are moving further up the agenda because no-one wants to fall on the wrong side of that."

Tax was the only KPMG division last year not to lift its profit contribution, which fell by £1m to £140m. Advisory services saw a 15% increase from £268m to £308m, while the audit side topped that with a 16% rise to £178m.

Mr Anderson said the company, which has around 10,800 staff across the UK, was now in investment and growth mode and hoped to expand in Aberdeen if resources could be secured.

Target business development areas were data security, internal audit and management consulting.

He said Scottish corporate activity was "stronger than a year ago", particularly in Aberdeen, while firms in the central belt were compensating for subdued domestic demand by looking to make overseas acquisitions.

"There is more in our pipeline on mergers and acquisitions since 2008," Mr Anderson said. "There has been a long-term trend of major companies in Scotland falling prey to overseas predators - we haven't seen any of that this year."

The company chairman said: "We have completed the first and toughest year of our three-year transformation plan, getting a sustainable grip on the bottom line.

"I'm really proud that, as a result, we have generated double-digit growth in profitability."

That would not only boost the bonus pool but allow £450m of investment in the UK over the next three years.

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