Apple and Google rake in more from 'app tax' on Britons than they pay in corporation tax, study finds

Apple and Google are raking in more from an ‘app tax’ on Britons than they pay in corporation tax, analysis shows.A study found Apple shelled out £322million in UK corporation tax last year (2025) while Google paid £146million in 2024 – the latest accounts available for both tech giants.But a ‘stealth’ levy of up to 30 per cent when users subscribe to their favourite digital services on iPhones and Google-powered smartphones is raising about £700million annually for the Silicon Valley firms.This is equivalent to about £55 annually for a family household with four smartphone users, the research found.But this is projected to rise to as much as £1.2billion in five years – or the equivalent of £91 for the same household.Over the next five years, the ‘app tax’ of up to 30 per cent on in-app purchases is projected to cost Britons £4.1billion.While the ‘tax’ is paid by app developers, including dating platforms such as Tinder and Hinge, campaigners say it is passed on to consumers. This forces them to pay up to a third more for their favourite services. Apple shelled out £322million in UK corporation tax last year (2025), according to its latest accounts Research found Google paid £146million in corporation tax in 2024, the latest accounts available for the tech giant in the UK Former Tory tech minister Damian Collins said the figures show 'we need a new level playing field to stop tech firms from overcharging and underpaying'The analysis found that for every £1 Apple and Google have contributed to the public purse in corporation tax, they have charged Britons around £1.50 for in-app purchases made on Apple and Google-powered devices.Former Tory tech minister Damian Collins said: ‘This shows how Google and Apple extract value from UK taxpayers.‘They pay far less tax than they should compared to other UK-based businesses and still overcharge business and consumers for using their products.‘We need a new level playing field to stop tech firms from overcharging and underpaying.’Dominic Fean, of campaign group the Coalition For App Fairness, said: ‘Apple and Google have been extracting more from Britons through their “app tax” than they have been paying the Treasury in corporation tax.‘That proves it: The current app store model is not working in the interests of the UK economy.’It comes after the competition regulator suggested Apple and Google’s charges were not ‘fair and reasonable’ as it launched proposals for a crackdown.Under the Competition and Markets Authority (CMA) plans, the Silicon Valley giants would be forced to give iPhone and Google-powered smartphone users access to cheaper deals when subscribing to their favourite apps – potentially saving Britons billions of pounds.The regulator, which launched its consultation on the plans in June, said action was ‘sorely’ needed.Apple, which offers its 1.5billion iPhone users access to around 1.8million apps, has faced criticism and court battles over its base rate of 30 per cent charge for years. It introduced a lower rate of 15 per cent for smaller companies whose earnings are below £740,000 in 2020. But critics say this remains too high.And few users are aware they can find their favourite digital goods and services cheaper elsewhere because Apple’s guidelines limit apps from giving them the option.Companies are not allowed to provide any other way for iPhone users to pay – such as external links or QR codes – and must go through Apple.Google charges fees of up to about 25 per cent for in-app purchases on its Play Store for Android devices but has relaxed curbs on preventing links to cheaper deals being offered.The Digital Markets, Competition and Consumers Act 2024 handed the CMA powers to set caps on fees charged, as well as the ability to fine Apple or Google.But its consultation has stopped short of proposing this and instead focuses on forcing Apple and Google to give iPhone and Google-powered smartphone users access to cheaper deals in a bid to create greater competition and drive down subscription charges.The consultation closed at the end of July and an announcement is expected later this year.The study by the CAF looked only at corporation tax, currently up to 25 per cent on profits, and not other taxes such as VAT, employer National Insurance contributions, business rates or customs duties.A Google spokesman said: ‘We pay all our taxes that are due.’Apple said only about 15 per cent of developers pay the ‘app tax’ and most of these pay the lower 15 per cent rate for smaller firms.A spokesman added: ‘The Coalition for App Fairness is funded by a small group of developers who simply don’t want to pay for the immense value they receive from Apple’s platforms and technologies.‘They represent only a very small portion of the broader developer community.’