New analysis shows that the UK is potentially missing out on billions of pounds of tax in 2021 from big tech companies as it strives to become a global tech superpower.

This is according to TaxWatch, which estimated how much seven of the biggest tech companies, including Google, Apple, and Microsoft, would have paid in taxes had their profits not been routed outside of the UK.

In 2021, these companies paid an estimated £750m in UK corporation and digital sales tax. However, TaxWatch estimated that they would have paid £2.8 billion in UK tax if their profits had not been routed outside the UK.

The analysis is based on TaxWatch’s estimate that the seven large US-based tech companies made almost £15bn of profit from UK customers in 2021 alone.

International tax rules permit them to shift much of this profit, however, outside of the UK so that they were only liable for UK taxes of around £753m.

By using complex tax driven structures, these companies appear to have reduced their UK corporation tax from what would have been around £2.8bn – a saving of roughly £2.0bn.

TaxWatch admitted that it was difficult to directly track the companies’ UK profits, so the campaign group aimed to show the UK tax position that would arise if the UK arms of these global groups declared profits at the same rate as they declare them worldwide, and then calculated the gap between UK corporation tax on these profits vs any tax payments that they could find from UK resident entities related to either corporation tac of the new Digital Services Tax.

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The campaign group detailed the difference for seven of the largest tech companies operating in the UK, though it did specify that these companies were not conducting any illegal activity in avoiding these taxes.

Corporate responses ranged, with Adobe stating they merely followed international tax law and regulation, Amazon questioning TaxWatch’s methods, and Meta saying they understand frustration with global tax systems and hoping to see further progress in fair taxation.