Palantir Paid Just £2.1m UK Corporation Tax in 2024 While Holding £670M in Government Contracts

Palantir paid just £2.1 million in UK corporation tax in 2024, despite holding an estimated £670 million in government contracts, according to a report published on Wednesday by the Centre for International Corporate Tax Accountability and Research (Cictar).

The software firm declared profits of more than £25 million in the UK that year, giving it an effective tax rate of just over 8 per cent, well below the UK's 25 per cent corporation tax rate. Globally, the report found Palantir's effective tax rate was just 1.4 per cent.

How Transfer Pricing Cuts the UK Tax Bill

The report, commissioned by the trade union Unison, points to Palantir's use of transfer pricing, an accounting practice where revenue earned in one country is booked in another.

Researchers found that while 26 per cent of Palantir's revenue comes from customers outside the US, only 4 per cent of that revenue is booked abroad. The company disclosed £159 million of revenue in its UK company filings for 2024, compared with £247 million in UK revenue disclosed in its US stock market filings.

'A major pattern emerges of Palantir shifting revenues and profits from contracts in Europe to the US parent company to take advantage of the massive tax shelter it has created there,' the researchers wrote.

Union Boss: 'Ministers Must Not Award Contracts to Tax-Shirkers'

Unison general secretary Andrea Egan said the practice needed to change. 'Systems that enable tax to be shirked on an industrial scale clearly have to change... Ministers shouldn't award contracts to run public services to firms that are starving them of cash,' she said.

Palantir holds a three-year, £240 million contract with the Ministry of Defence, awarded last December without a competitive tender. The company's software is also used across the NHS.

A Palantir spokesperson said the company complied with the tax regimes of the jurisdictions it operates in, and rejected criticism of its transfer pricing practices as 'simply not credible'. The spokesperson said it was standard for US parent companies to record revenue earned abroad, and that the company paid $148 million in UK employment taxes last year, including employer national insurance contributions.

What It Means for Public Contracts

The findings arrive as Palantir's business accelerates on both sides of the Atlantic. The company's shares jumped 17 per cent after chief executive Alex Karp forecast worldwide revenue would nearly double this year to $8 billion (£5.95bn), a figure he described as 'otherworldly'. Palantir's US commercial revenue alone rose 149 per cent in the second quarter.

That growth trajectory sharpens the question raised by the Cictar report: whether firms generating rapidly expanding profits from UK public contracts should be contributing more to the exchequer. The UK remains Palantir's largest market outside the US, with around 750 of its non-US staff based in Britain, yet the report found UK tax collected was lower than in South Korea, Japan, France or Germany.

For government departments awarding contracts to Palantir, the disclosures could increase scrutiny over procurement decisions, particularly given the MoD deal was awarded without a competitive tender. Unions and campaigners are likely to use the findings to push for tighter conditions on how public bodies contract with multinational tech firms operating under similar tax structures.

Palantir's software increasingly underpins core public services, from NHS data systems to defence operations, at a time when government departments face sustained budget pressure. A tax contribution disproportionately small relative to the scale of its public sector work raises a central question: are taxpayers getting enough value from these contracts beyond the services delivered? And is the current tax framework fit for purpose when multinational tech firms can structure their earnings across borders with such flexibility?