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TikTok’s UK arm has raised the amount set aside for potential legal battles and regulatory investigations to more than $1 billion, in the same year that the business swung to profit and recorded its first annual operating profit.
Provisions and contingent liabilities for “legal and related matters” rose by more than 13 per cent to about $1.05 billion for the year ending December 2025, according to the filings for TikTok Information Technologies UK, whose operations also cover Europe, Latin America and Africa.
TikTok said it recorded liabilities when it was “probable” they would be incurred and total losses could be “reasonably estimated”, adding that the outcome of any proceedings was “inherently uncertain”.
The latest accounts show the increase was driven substantially by ongoing cases and appeals involving Ireland’s data watchdog, the Data Protection Commission. Last year the commission imposed a fine of 530 million euros on the company for failing to guarantee that data from European users sent to China would not be accessed by the Chinese government. It has also previously fined the technology group for breaking EU data laws in its handling of children’s accounts, such as by putting 13 to 17-year-olds on a public setting by default.
Crucially for anyone reading the numbers as a measure of TikTok’s exposure, the amounts set aside would not yet encompass the UK government’s social media ban for under-16s, which comes into effect in the spring and which industry groups have argued is unworkable. Nor do they cover Ofcom’s investigation into whether TikTok is failing to protect children from harmful content, which was announced in July and remains at an “early stage”.
Responding to the social media ban, the technology group said it would “continuously monitor regulatory developments of this kind and engage constructively with policymakers, ensuring our safety tools keep pace with the evolving regulatory landscape”.
Turnover up 45.7 per cent
The accounts show TikTok UK swung to a profit last year after a 45.7 per cent increase in turnover to $9.2 billion. Pre-tax profits rose to $280.4 million, from a loss of $616 million the previous year, while the company achieved an annual operating profit for the first time of $451.9 million.
TikTok, whose platform serves more than a billion users each month, said it regarded 2025 as an “inflection point” in its transition from a “capital investment phase to sustained operating profitability”, adding that the turnaround in part reflected the fact that fixed costs for infrastructure such as data centres were spread across a “larger revenue base”.
Its performance was also driven by “continued scaling of livestreaming and ecommerce monetisation”, TikTok said, referencing the rapid ascent of TikTok Shop, which has become the UK’s fourth-largest retailer of beauty products after a 60 per cent increase in sales last year. That growth matters to the small brands and independent sellers that have built distribution on the platform, whose route to market now sits inside a business facing an open regulatory file in Britain.
Total assets increased to $7.5 billion alongside a reduction in the group’s net liabilities, which was driven primarily by the issuance of $2.7 billion of share capital and the acknowledgment of a “previously unrecognised deferred tax asset”.
Moderation jobs go as AI takes over
Last year TikTok’s Chinese owners, ByteDance, announced plans to extend the use of artificial intelligence to tackle harmful content. However, hundreds of British jobs in content moderation were culled as a result, alongside some in its trust and safety teams in southeast Asia.
The proposals enraged unions and campaigners, who called on MPs to stop TikTok “sacrificing online safety with mass AI-driven job cuts”. Sacked TikTok moderators launched a legal challenge in January, accusing the social media company of “oppressive and intimidating” union-busting, which it strongly denied.
Companies House filings show average monthly headcount across TikTok UK and its international subsidiaries declined by more than 1,000 year-on-year to 6,842. Those in operational and administration roles dropped to 4,671 from 5,289, while those in sales and marketing fell to 1,834 from 2,330.
