Palantir paid just £2m corporation tax in UK in 2024 despite lucrative public sector contracts
Palantir, the US software firm that has secured major contracts with the NHS and Ministry of Defence, paid just £2.1m in UK corporation tax in 2024 despite booking £247m in UK revenues, according to a new report. The research, commissioned by the trade union Unison, found the company's global effective tax rate is just 1.4%, with critics arguing its accounting practices allow it to shift profits away from where the work is actually done, undermining the public services it is paid to support.
The report, published by the Centre for International Corporate Tax Accountability and Research, found Palantir's UK effective tax rate was around 8% against a 25% headline rate, with the shortfall attributed largely to "transfer pricing", whereby UK contracts are booked through Palantir's US parent company. The firm, whose CEO Alex Karp this week forecast revenues would almost double to $8bn, holds an estimated £670m in UK government contracts, including a £240m MoD deal awarded without competitive tender. Unison's Andrea Egan said tax-avoiding firms should not be handed public service contracts.
- Palantir paid £2.1m UK corporation tax in 2024 on £247m revenue
- Report says firm shifts profits to US via transfer pricing
- Union calls for government to stop awarding it public contracts
Both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Those defending Palantir's position argue that the company has done nothing improper, simply following the tax rules that Parliament and HMRC have set, including reliefs such as R&D tax credits and capital allowances that exist precisely to encourage investment and technological development in the UK. They point out that corporation tax is levied on profit, not revenue or contract value, so a large contract book does not automatically translate into a large tax bill, particularly for a company still investing heavily in growth, engineering and infrastructure. From this perspective, singling out one firm for using lawful incentives risks conflating tax avoidance with tax planning, and could discourage the kind of foreign direct investment and skilled employment that ministers say they want to attract.
The case against
Critics, including the union official quoted, argue that when a company earns hundreds of millions from taxpayer-funded contracts, the public has a reasonable expectation that a fair share flows back into the public purse rather than being minimised through international accounting structures. They contend that low tax contributions from firms deeply embedded in public services undermine trust in outsourcing and procurement, especially at a time of constrained public finances and pressure on frontline budgets. For this side, the issue is not necessarily illegality but a values-based case for reform: that global tax and accounting practices allow profitable multinationals to shift or defer tax in ways ordinary taxpayers and smaller domestic firms cannot, and that public bodies should weigh a supplier's tax conduct when awarding sensitive, lucrative contracts.