Palantir paid £2m UK corporation tax in 2024 despite lucrative public sector contracts

Low UK Tax Contribution

Palantir, a software group, paid only £2.1 million in UK corporation tax in 2024, despite declaring over £25 million in profits. This resulted in an effective tax rate of just over 8%, significantly lower than the UK's 25% corporation tax rate for that year.

This low tax payment occurred while the company holds substantial public sector contracts in the UK, estimated at £670 million as of 2026, including a £240 million deal with the Ministry of Defence awarded without competitive tender.

Global Tax Practices

A report by the Centre for International Corporate Tax Accountability and Research (Cictar) indicates Palantir's global effective tax rate is 1.4%. In the US, the company paid no federal taxes and just over $2.5 million in state taxes last year.

The UK is Palantir's largest market outside the US, with £247 million in revenues declared for 2024. Despite this, the tax collected in the UK was less than in South Korea, Japan, France, or Germany.

Reasons for Low Tax

Researchers suggest that one reason for the low UK tax payment is Palantir's practice of accounting for its UK revenues in the US, a method sometimes referred to as transfer pricing. This involves shifting revenues and profits from European contracts to the US parent company to utilize a large tax shelter there.

Industry and Union Concerns

Andrea Egan, general secretary of the trade union Unison, which commissioned the report, criticized systems that allow for large-scale tax avoidance. Egan stated that tech giants should pay their due and that ministers should not award public service contracts to firms that are perceived to be depriving public services of funds.