British taxpayers strongly support higher taxes on major technology companies, according to new polling that comes as the government faces renewed pressure over the future of the UK’s digital services tax.
A survey reported by The Guardian found that 67% of respondents believe the government should increase digital services taxes on multinational technology groups to boost their overall tax contribution in the UK. The polling was carried out by the Fair Tax Foundation, which campaigns for responsible corporate tax conduct and provides certification for businesses that meet its standards.
The findings put fresh attention on the UK’s digital services tax, a 2% levy introduced in 2020 on certain revenues generated from UK users by large search engines, social media platforms and online marketplaces.
The tax affects some of the world’s biggest technology companies, including firms such as Google, Amazon and Meta. It was designed to address a long-standing problem in international tax: digital companies can generate substantial value from users in a country without necessarily having the same physical presence or taxable profit there as more traditional businesses.
For supporters, the tax is a practical way to ensure large global platforms make a fairer contribution to the UK public finances. For critics, it is a blunt revenue-based levy that can increase costs for advertisers, sellers and consumers, while also creating tension with the United States.
A small tax with a big political profile
On paper, the digital services tax is modest. It is charged at 2% and applies only to groups with more than £500m in global revenues from in-scope digital activities and more than £25m in UK revenues from those activities.
It is not aimed at small businesses and does not apply to every digital company. Instead, it targets specific business models where user participation, online marketplaces, search activity and social media engagement can create significant commercial value.
Even so, the tax has become politically important because of who pays it and what it symbolises.
The UK tax system, like many around the world, was built around physical presence, local operations and profits reported within national borders. The digital economy has challenged that model. A platform can earn advertising revenue, commission or data-driven commercial value from UK users while booking profits elsewhere through complex international structures.
The digital services tax was intended to bridge part of that gap until a global agreement could be reached.
Revenue has grown since launch
The tax has raised more than initially expected. HM Treasury’s review of the policy said it generated around £808m in 2024-25, up from £380m in 2021-22.
That is not a large sum in the context of total UK tax receipts, but it is still significant money at a time when the government is under pressure to fund public services, manage debt and avoid further tax increases on households.
The public mood helps explain why the issue is politically sensitive. According to the Fair Tax Foundation polling reported by The Guardian, three-quarters of respondents said they would prefer to work for and shop with a business that can prove it is paying its fair share of tax.
That matters because tax has become part of corporate reputation. Businesses are increasingly judged not only by their products, prices and environmental claims, but also by whether they appear to contribute fairly to the societies in which they operate.
For large technology companies, that scrutiny is especially sharp. Their services are embedded in everyday life, their market power is substantial, and their profits are often global in scale.
The argument for increasing the levy
The case for increasing the digital services tax is straightforward.
Supporters argue that major technology platforms benefit from UK users, UK infrastructure, UK consumer trust and UK public services. If those businesses are generating substantial revenues from the UK market, they should make a contribution that better reflects that activity.
They also argue that the current 2% rate is low compared with the economic power of the companies involved. Some European countries have introduced or considered higher digital levies, and campaigners argue that a higher UK rate could raise additional revenue without affecting smaller firms.
There is also a fairness argument. High street retailers, hospitality businesses and other traditional firms often face corporation tax, employer national insurance, business rates, VAT administration, property costs and local employment obligations. Online platforms can operate at scale with a very different cost base.
For bricks-and-mortar businesses, the concern is not simply whether Big Tech pays tax. It is whether the tax system has kept up with the way modern commerce actually works.
The argument against increasing the levy
There are also serious objections.
The biggest concern is that a revenue-based tax does not necessarily fall only on the large companies it targets. Platforms can pass some of the cost on to advertisers, third-party sellers or users through higher fees.
That means a tax aimed at global technology groups can still affect smaller businesses that rely on those platforms to sell products, advertise services or reach customers.
This is particularly relevant for small online retailers, local firms using digital advertising and businesses selling through online marketplaces. If platform fees rise, the cost can eventually flow through to margins, prices or consumer choice.
There is also the international trade risk. The United States has repeatedly objected to digital services taxes, arguing that they unfairly target American companies. Donald Trump has previously threatened tariffs against countries that maintain such levies.
That creates a difficult balancing act for the UK. Ministers may want to show they are standing up for tax fairness, but they also want to preserve good trading relations with the US and maintain Britain’s reputation as an attractive place for technology investment.
The global tax deal problem
The UK has always described the digital services tax as an interim measure.
The preferred long-term solution is an international agreement that changes how taxing rights are allocated between countries. The OECD-led “Pillar One” plan was intended to give market countries more rights to tax part of the profits of the largest and most profitable multinational companies, even where those companies do not have a traditional physical presence.
In theory, that would make unilateral digital services taxes less necessary. In practice, progress has been slow and politically difficult.
As long as a global solution remains delayed, governments face a choice: keep interim taxes in place, increase them, reform them or abandon them and risk losing revenue and public confidence.
The UK has so far kept the tax. The question now is whether public support for a tougher approach will encourage ministers to go further.
Why this matters for business
For business leaders, this debate is about more than tax policy.
It is about the future relationship between governments and major digital platforms. The same companies affected by digital services taxes are also central to online advertising, e-commerce, cloud computing, artificial intelligence, app stores, social media, digital payments and consumer data.
Governments are increasingly asking whether these platforms have become too important to be taxed and regulated under old rules.
At the same time, the UK wants to be seen as a global technology hub. It wants to attract investment in artificial intelligence, software, data centres, fintech and digital infrastructure. A tax system perceived as hostile to technology could undermine that ambition.
The challenge is therefore to tax digital activity fairly without discouraging innovation or pushing costs onto smaller businesses.
That requires policy design, not just political messaging.
A reputational issue for Big Tech
The Fair Tax Foundation polling also highlights a broader reputational challenge for technology companies.
Public attitudes towards Big Tech have changed. The sector is still admired for innovation, convenience and growth, but it is also under scrutiny over tax, competition, online safety, data protection, artificial intelligence and market dominance.
Tax is one of the clearest ways this public concern is expressed. People may enjoy using digital services, but still feel that the companies behind them should make a more visible contribution to the countries where they operate.
That is why simply arguing that companies comply with the law may no longer be enough. The public debate increasingly focuses on whether the law itself remains adequate.
What happens next
The government has several options.
It could leave the digital services tax unchanged while continuing to wait for an international agreement. It could increase the rate, widen the scope or tighten the rules. It could also use the issue as leverage in broader negotiations over trade, technology regulation and corporate taxation.
Each option carries risk.
Keeping the tax unchanged may be criticised as too cautious. Increasing it may raise revenue and satisfy public opinion, but could trigger retaliation or higher costs for UK businesses using digital platforms. Removing it would please some US policymakers and technology companies, but would be politically difficult when voters appear to favour a tougher approach.
For now, the polling suggests that the public mood is firmly on the side of higher taxation for the largest digital companies.
The harder question is whether that public support can be turned into a policy that is fair, effective and economically sensible.
The digital services tax was created as a temporary fix for a tax system struggling to keep pace with the digital economy. Six years later, the temporary fix is still here, the global solution remains uncertain, and the pressure on governments to act has not gone away.
