- Palantir paid £2.1 million in UK corporation tax in 2024, despite generating £247 million in UK revenue.
- The AI company now holds an estimated £670 million in UK government contracts.
- Researchers say international tax arrangements reduce Palantir's tax bill, while the company says it follows all applicable tax laws.
The amount of UK corporation tax paid by Palantir has come under fresh scrutiny after a report claimed the US software company paid just £2.1 million in Britain during 2024, despite the UK becoming one of its biggest overseas markets and a major source of government contracts.
The findings, published by the Centre for International Corporate Tax Accountability and Research (CICTAR) and commissioned by trade union Unison, suggest Palantir generated £247 million in UK revenue during 2024 while paying corporation tax at an effective rate of just over 8 per cent, well below the UK's headline corporation tax rate of 25 per cent.
Growing UK business, shrinking tax bill
Palantir has rapidly expanded its presence in Britain, becoming a key technology supplier to public sector organisations including the NHS and the Ministry of Defence. According to the report, the company now holds an estimated £670 million in UK government contracts, including a £240 million Ministry of Defence agreement awarded in December 2025 without a competitive tender.
Researchers also estimated Palantir earned more than £25 million in UK profits during 2024. Yet the company paid less corporation tax in Britain than it did in countries including France, Germany, Japan and South Korea, despite the UK being its largest market outside the US.
The report argues that one reason is the way Palantir allocates revenue between its international subsidiaries and its US parent company through transfer pricing, a common accounting practice used by multinational businesses.
According to the researchers, while 26 per cent of Palantir's global revenue comes from customers outside the US, only 4 per cent is officially recorded outside the country. They suggest contracts are often signed through the US parent company, with overseas subsidiaries receiving service fees to deliver the work locally.
The report also highlights differences between Palantir's filings. While the company's UK accounts reported £159 million in revenue for 2024, its filings to US investors disclosed £247 million in UK revenue.
Palantir rejects criticism
Palantir disputed the report's conclusions, saying it complies with tax rules in every jurisdiction where it operates.
A company spokesperson reportedly said criticism of its use of transfer pricing was "simply not credible", describing the practice as standard across large multinational companies.
The spokesperson also said differences between UK company accounts and US stock market filings reflect normal accounting requirements, with overseas revenue often recorded by the parent company because it owns the underlying products and intellectual property.
The report also points to employee share awards as another factor reducing Palantir's corporation tax bill. Under existing tax rules, companies can deduct the value of employee share options when calculating taxable profits.
Palantir said this is a widely used tax measure that gives employees a direct stake in the company and can result in more tax being paid overall because employees pay income tax on those shares, often at higher rates than corporation tax.
According to the report, Palantir has also accumulated billions in tax credits and carried-forward losses in the US, which researchers estimate could significantly reduce its federal corporation tax liability for years to come.
The report estimates Palantir's global effective tax rate stood at just 1.4 per cent during 2024. In the US, researchers said the company paid no federal corporation tax and around £1.9 million ($2.5 million) in state taxes.
Andrea Egan, General Secretary of Unison, reportedly said tax systems that allow multinational companies to significantly reduce their tax bills need reform, arguing that businesses benefiting from major public contracts should make a greater contribution to public finances.
The report comes as Palantir continues to grow rapidly. The company's shares rose 17 per cent after chief executive Alex Karp forecast global revenue would almost double to £5.95 billion ($8 billion) this year, reportedly describing the company's growth as "otherworldly".
