The £5bn cost if Keir Starmer bows to Trump and big tech

Tax Justice UK is an advocacy organisation calling for progressive tax reform. One reform they’ve championed is the UK’s Digital Services Tax (DST) which is set to generate £4.4bn – £5.2bn between 2024 and 2029. The group is now warning the UK could miss out on this money, with Donald Trump pressuring Keir Starmer to row it back.

State visit: Starmer and Trump

This week, Donald Trump will enjoy an unprecedented second state visit. Tax Justice warn this could cost the UK more than just the cost of hosting him, with Trump threatening:

new tariffs, claiming – along with the US tech industry – that the DST wholly or mainly targets US firms. Freedom of Information data recently obtained by TaxWatch directly challenges this, with HMRC data showing that 37% of multinationals assessed as liable are not US-headquartered; in 2023/24 (latest year figures available), 34% of those filing returns and 28% of those paying liabilities were non-US.

While it’s correct it will mostly target US firms, this is because US firms dominate the global market. US tech domination is drawing criticism currently because the AI bubble has led to these companies accounting an unprecedented percentage of all stocks, putting the world at risk of a financial meltdown if the bubble bursts.

Speaking on how much good the DST could deliver to the UK, Tax Justice UK note:

The Digital Services Tax – a 2% levy on revenues from large digital platforms including search engines, social media and online marketplaces – is projected to generate £4.4bn-£5.2bn between 2024 and 2029 [2, 3]. 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) [4]. The report warns that DST receipts are only set to grow, making the DST an increasingly important part of the UK’s business tax base.

This is in stark comparison to what it would mean to technology companies:

For Big Tech, these sums are small. Amazon alone recently reported £29bn in UK revenues in 2024, equivalent to over £900 every second – yet refused to disclose how much profit it made in the UK, prompting renewed criticism over transparency.

Public support

Tax Justice UK commissioned YouGov to poll Britons on taxing big tech companies. They report the results as follows:

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.

Faiza Shaheen, a former Labour candidate and current executive director of Tax Justice UK, had this to say on Starmer/Trump:

Our government needs to be clear that any cuts to the Digital Services Tax are not on the negotiating table. Millions are struggling with affording the basics; public services including hospitals and schools need more funding to deliver what the country needs; and the Chancellor is scrambling around to fill a reported financial black hole.

The public are right to think that the government must hold their position on this. Our tax system is asking too much of everyday people and small businesses – if anything, big corporations like Amazon and Google should be paying more.

Wealth taxes

Tax Justice UK are proponents of a wealth tax, describing their proposal as follows:

We’re campaigning for a new wealth tax: a 2% levy on individuals who own assets worth more than £10 million – it would affect 0.04% of the UK population and would raise £24 billion a year. We’re also campaigning to apply national insurance to investment income, raising up to £10.2 billion a year.

Calls for a wealth tax are growing in the UK. New Green Party leader Zack Polanski frequently releases messages like the following:

Lower bills.

Reduce rents.

Fund our public services.

It’s time to tax wealth. Not work. pic.twitter.com/JEgytfZpS6

— Zack Polanski (@ZackPolanski) July 3, 2025

‘Your Party’ politicians Zarah Sultana and Jeremy Corbyn have also spoken favourably of wealth taxes:

Tonight, I voted against the Tories’ anti-strike bill.

Defending the right to strike is the bare minimum. We need a wealth tax to give workers a proper pay rise and save our public services.

We are a movement — and we’re not going anywhere. pic.twitter.com/xenW55OfXm

— Jeremy Corbyn (@jeremycorbyn) May 22, 2023

A 2% wealth tax on assets over £10 million could raise £24 billion — more than enough to fund Winter Fuel Payments, scrap the two-child benefit cap and support public sector workers.

It’s time for the sixth-largest economy to tax the super-rich and distribute wealth fairly. pic.twitter.com/6lvepgBGav

— Zarah Sultana MP (@zarahsultana) September 11, 2024

The latest group calling for a wealth tax is ‘Mainstream’, the Labour campaign group linked to Andy Burnham:

The Labour Party can share your values again.

If you speak up.

Join the growing movement of Labour members and trade unionists pushing Labour in the right direction: https://t.co/KF5OIOhf9t pic.twitter.com/9SKMD7p14b

— Mainstream (@mainstreamlbr) September 11, 2025

Featured image via Tax Justice UK