Palantir has secured hundreds of millions of pounds in British state contracts while paying a fraction of the headline corporation tax rate. Its tax arrangements show how monopoly capital turns public dependence into private accumulation.
Palantir paid just £2.1m in UK corporation tax in 2024, despite declaring profits of more than £25m. That gave the US software company an effective British tax rate of a little over 8 percent, while the official corporation tax rate stood at 25 percent.
At the same time, public money has poured into Palantir’s accounts. As of 2026, the company held an estimated £670m in British government contracts. Its customers include the NHS and the Ministry of Defence. The MoD’s three-year, £240m deal, awarded without competitive tender last December, is only the clearest example of how closely this private technology corporation has been drawn into the machinery of the British state.
The arrangement is simple enough. Workers fund public services through taxes. Ministers then hand important systems within those services to a private company. The company extracts revenue, limits the profits booked in Britain and returns as little as it can to the public purse. The public assumes the cost; private capital takes the gain.
This is what the capitalist state does. It isn’t a neutral referee standing above the classes. It organises society in the interests of the owners of capital. When ministers claim there isn’t enough money for hospitals, wages or local services while signing enormous contracts with firms that minimise their tax bills, they’re showing us which class the state serves.
An “otherworldly” boom built on public money
Palantir’s business is expanding rapidly. Its shares jumped 17 percent in early trading on Tuesday after chief executive Alex Karp forecast that worldwide revenue would almost double this year to $8bn (£5.95bn), a result he described as “otherworldly”.
The company’s tax contribution is rather more down to earth. According to a report by the Centre for International Corporate Tax Accountability and Research, commissioned by Unison, Palantir’s global effective tax rate is just 1.4 percent. In the United States last year, it reportedly paid no federal corporate income tax and only a little over $2.5m in state taxes.
Britain is Palantir’s biggest market outside the US. The company declared £247m in British revenue for 2024 in its stock-market filings, and around 750 of its non-US employees work here. Yet Britain collected less tax from Palantir than South Korea, Japan, France or Germany.
Unison general secretary Andrea Egan put the immediate issue plainly: “Systems that enable tax to be shirked on an industrial scale clearly have to change. The likes of Palantir need to stump up what’s due. Tech giants raking off billions in profit shouldn’t be free to pay what they please. Ministers shouldn’t award contracts to run public services to firms that are starving them of cash.”
She’s right. But the problem goes deeper than ministers failing to enforce fair play. Under monopoly capitalism, the largest firms don’t merely compete within markets. They acquire the power to shape the rules, move money across borders and bargain with governments from a position of strength. Palantir’s role in health and military infrastructure gives it still more leverage. Dependence on a private contractor today becomes the excuse for another contract tomorrow.
Transfer pricing and the geography of profit
The report identifies transfer pricing as one reason for Palantir’s low tax payments outside the US. This is the practice by which different companies inside the same corporate group charge one another and allocate revenue and profit between jurisdictions.
Although 26 percent of Palantir’s revenue comes from customers outside the United States, only 4 percent is booked abroad. In Britain, Palantir’s UK company filings disclosed £159m in revenue for 2024, while its stock-market filings disclosed £247m in UK revenue. Researchers believe contracts may be signed with Palantir’s US companies, which then pay local subsidiaries a service fee to carry out the work.
As the report states: “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.”
Palantir rejects that criticism. A company spokesperson said attacking its use of transfer pricing was “simply not credible” and added: “Transfer pricing, which allocates a company’s profits among entities within the Palantir group of companies, is an entirely standard practice that is virtually universal for large multinational companies.”
That defence gives away more than it intends. The practice is standard because tax avoidance and profit shifting aren’t marginal abuses committed by a few bad firms. They’re normal methods of multinational capital. Legality doesn’t settle the class question. Capitalist law defines the corporation’s right to organise its affairs for private accumulation; it doesn’t guarantee that wealth produced through workers, public contracts and social infrastructure will be returned to society.
Nor is it accidental that profits tend to flow back towards the imperial centre. Palantir is a US corporation securing a major place inside military and public-service infrastructure. Revenue gathered from European markets is pulled towards the American parent, while US political power helps create the tax shelter in which it lands. Lenin identified monopoly and finance capital, backed by state power, as central forces of imperialism. Palantir is a modern expression of it: data and artificial intelligence have joined banks, arms and industry as instruments through which capital reaches across borders.
Workers pay while capital accumulates
Share-based pay provides another route for Palantir to reduce its corporation tax bill. When staff share options vest, the company can deduct their value. Employees then become liable for income tax, often at a higher rate. In other words, the tax doesn’t disappear altogether; much of the burden is shifted from capital onto labour.
Palantir presents this as a virtue. Its spokesperson said the measure was “a completely standard tax measure established under the previous Labour government [in the UK]”, intended to give employees a stake in the company. The spokesperson continued: “Crucially, it means that more tax is paid because corporation tax is 25 percent, whereas for these shares, income tax, which is higher, is due.”
But workers paying income tax on part of their compensation isn’t the same thing as the corporation paying tax on its profits. Palantir also says it paid $148m in UK employment taxes last year, including employer national insurance and income tax paid on behalf of staff. Lumping these sums together blurs the essential distinction between taxes arising from workers’ employment and taxes charged to accumulated corporate profit.
In the US, tax credits generated by share options, together with losses carried forward from earlier years, have created a shelter worth billions. At its current rate of profit, the report says Palantir could avoid US federal income tax for “nearly a decade”. Donald Trump’s reduction of the federal corporate tax rate from 35 percent to 21 percent in his first term made the conditions still friendlier. In his second, Trump secured a US carve-out from the international agreement for a 15 percent minimum tax on large multinationals.
This is imperialism in tax policy as well as foreign policy. The US state shields its corporations at home while those corporations draw income from public budgets and markets abroad. British ministers, far from resisting, invite them further into the NHS and defence system.
Public services should serve the public
Palantir says it follows the tax rules in every jurisdiction where it operates. That may well be its strongest defence, but it’s also the sharpest indictment of the rules. A system written around private property, corporate secrecy and the free movement of capital will reliably produce this result. The state feeds the monopoly; the monopoly invokes the law; workers are told that empty public coffers require another round of cuts.
There’s no easy solution to this problem. We live in a liberal democracy: a system where the private ownership of capital is protected and privileged, giving those who own it huge control over both the economy and politics. Until we manage to build a socialist democracy — one where workers not business control state power — corporations like Palantir are going to continue to have a cosy relationship with the government, control over vital infrastructure, and often be allowed to avoid taxes.
