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Press release – Brits don’t want the government to cave to Trump on tax

16 December, London – New reports have emerged that President Trump has effectively blocked the USA/UK ‘Tech Prosperity Deal’, with tax justice advocates believing it to be an effort to strong-arm the UK into dropping its Digital Services Tax (DST).

The DST – a 2% levy on revenues from large digital platforms including search engines, social media and online marketplaces [1]- is projected to generate £4.4bn-£5.2bn between 2024 and 2029 according to research by TaxWatch [2]. This is broadly comparable to funding the cost of training between 108,000-128,000 new nurses (25-29% of the current NHS nurse workforce) [3]. The report projects that DST receipts are only set to grow, making the levy an increasingly important part of the UK’s business tax base. 

Mike Lewis, Director of TaxWatch, said:

“Is the promised tech investment actually worth sacrificing the few defences the UK has against big tech tax dodging? The amounts of investment that big tech companies have promised are in the same ballpark as the amounts of UK tax we estimate their tax structuring avoids every seven to eight years. And though they’re promising to build data centres and supercomputers here, those promises come with vanishingly small numbers of jobs attached.” 

Furthermore, at the Chancellor’s Budget in November, the government released a review of the tax and found that implementation cost just £6.3m. In the year 2024-25 it raised around £800m – meaning that each £1 spent on administering the tax returned £126 in the latest financial year, a highly efficient ratio of tax administration. Since its inception in 2020, there have been no incidences of fraud or avoidance identified. The government review also found that the tax had not constrained the market in digital services and advertising: contrary to claims from the tech industry that the tax is onerous and market-distorting. The increasing growth of these sectors since 2020 suggests that “the impact of DST in the broader market remains limited”, according to the Treasury.

Caitlin Boswell, Head of Advocacy & Policy at Tax Justice UK said:

“The UK government should be crystal clear that it won’t give tax breaks to Big Tech companies and concede to pressure from Donald Trump. The US President is trying to strong-arm countries into getting his way on taxes and tariffs, but the British public won’t have it and neither should the Prime Minister. The DST is a vital measure to make sure some of the world’s biggest and richest multi-national companies pay fair taxes where they operate. It will raise billions of pounds over the parliament that should be used to train new nurses and other public sector workers and improve people’s lives, not foregone to line shareholders’ pockets.“

Polling commissioned by Tax Justice UK and conducted by YouGov in August suggests public opinion is firmly against Big Tech concessions [4]:

  • Two thirds (67%) want the UK to enforce its laws on Big Tech even if it strains relations with Trump – rising to 79% among those who voted Labour last election.

  • Almost half (45%) said UK enforcement of laws addressing the influence and power of Big Tech companies is too relaxed. Only 6% thought the opposite. 

  • Half (51%) of respondents said the current 2% DST rate is too low.

  • On including the DST in trade negotiations, 45% were unsure, but among those with a view, nearly two-thirds (64%) opposed using the tax as a bargaining chip.

[Ends]

Notes to editors:

  1. Digital Services Tax (DST): Finance Act 2020; 2% levy on UK-linked revenues from large groups providing online search, social media, and marketplaces. Thresholds: £500m global / £25m UK in-scope revenues.

  2. Revenue projections: £4.4–£5.2bn (2024–2029) – TaxWatch analysis based on trends in DST receipts, UK digital ad spend (IAB UK) and UK online retail sales (ONS). See pages 7/8 for more details on methodology. https://www.taxwatchuk.org/dst-under-threat/ 

  3. Nurse comparison: Based on Royal College of Nursing/London Economics estimates (c. £37k per nurse training, uplifted for inflation), projected DST revenues equate to 108,000–128,000 nurse trainings. See page 16 for more details on methodology.

  4. Survey commissioned by Tax Justice UK and conducted by YouGov, 26–27 August 2025, sample size 2,342 UK adults. Full data tables available on request.

  5. Investment vs tax avoidance: for example, in 2023 TaxWatch estimated that Google/Alphabet had avoided up to £691m of UK taxes in calendar year 2021, based on published financial statements and accounts. In the September ‘tech prosperity deal’, Google promised £5bn of investment – equivalent to the amount of UK tax avoided in seven or eight years. See https://www.taxwatchuk.org/seven-large-tech-groups-estimated-to-have-dodged-2bn-in-uk-tax-in-2021/

  6. Investment vs jobs: September 2025 UK investment pledges from Microsoft, Nvidia, Salesforce and Alphabet/Google did not state how many new jobs they are going to create alongside the announced data centres and computing infrastructure. Microsoft stated simply that its investment would support its existing “ongoing [UK] operations and…workforce”. Google’s press release claimed that its investment would create 8250 new jobs at “British businesses” generally – presumably its suppliers and clients – while not promising any new Google jobs. The UK government claimed that Palantir’s £1.5 billion investment would create “up to 350” new UK jobs: an astronomical ratio of £4.2 million of investment for each new job created, which suggests that Palantir’s promised investment is is extremely capital heavy and will bring comparatively few jobs and limited real economic activity to the UK. 

  7. Moreover, a systematic study in 2023 found that only about two-thirds of US firms making job announcements as a result of subsidies actually followed through.