Pillar 2: What you need to know before 30 June 2026

The Organisation for Economic Co-operation and Development (OECD)’s Pillar 2 establishes a global minimum tax aimed at large multinational enterprises (MNEs). The deadline for the first UK returns due for periods ended 31 December 2024 is 30 June 2026. This leaves just under three months for groups to ensure they are meeting their UK filing obligations.

This article sets out who is affected, what must be filed in the UK, and what you need to do now.

What is Pillar 2?

Pillar 2 forms part of the OECD’s Base Erosion and Profit Shifting (BEPS) initiative and introduces a global minimum effective tax rate of 15% for multinational groups.

In broad terms, Pillar 2 applies where a group has annual consolidated turnover in excess of €750m in at least two of the last four accounting periods. Where taxes payable in any jurisdiction within the group fall below the 15% effective tax rate, a ‘top‑up tax’ may arise.

While the mechanics are complex and often managed at group level, local UK entities have separate filing obligations. This is regardless of whether any additional tax is ultimately payable.

When does Pillar 2 apply in the UK?

A significant number of UK entities that are part of large MNEs assume that Pillar 2 is being handled centrally by a group tax team overseas, or that no UK action is required if there is no top‑up tax to pay. However, this assumption is often incorrect.

UK Pillar Two rules apply to accounting periods commencing on or after 1 January 2024 and apply to MNEs with a UK presence, including a UK subsidiary or permanent establishment. For groups with a 31 December year end, the key dates are as follows:

First affected period: Year ended 31 December 2024
HMRC registration deadline: 30 June 2025 (6 months after the first year the MNE falls in scope)
First UK filing deadline: 30 June 2026 (18 months after year end)
Ongoing deadlines: 15 months after the end of each accounting period. For December year ends, this will be 31 March annually

Whilst there was a lot of fanfare earlier this year regarding the side-by-side agreement with the US which effects US headed MNEs, the agreement does not remove UK filing obligations and US headed groups must still comply with Pillar 2 rules in the UK even after the agreement takes effect.

What needs to be filed in the UK?

Where an MNE that falls within the scope of Pillar 2 has a UK subsidiary or permanent establishment, the following returns should be submitted in the UK by the registered filing member:

A Pillar 2 global information return (GIR), or an overseas return notification (ORN) if the GIR is being filed in another jurisdiction which the UK has an information sharing agreement with
A UK domestic top‑up tax self‑assessment return

The UK domestic top‑up tax is a qualifying domestic minimum top-up tax (QDMTT). It can be credited against multinational top-up tax due in respect of the UK in the parent entity jurisdiction. As the corporation tax rate in the UK is 25%, far in excess of the minimum 15%, in the vast majority of cases, the UK self‑assessment return is expected to be a nil return. However, this does not remove the obligation to file and calculations will need to be performed on a case-by-case basis to verify there are no top up taxes due.

Crucially, these returns:

Must be filed with HMRC using commercial software compatible with HMRC’s systems
Are not covered by existing corporation tax filings
Are not optional, even where the global information return and global top up tax is being filed and paid in another jurisdiction

A common misunderstanding

UK companies may believe that because a group tax function or overseas adviser is preparing Pillar 2 calculations centrally, no further action is needed in the UK.

However, even where global calculations and group‑level filings are handled elsewhere, UK filing obligations remain. Failure to submit UK returns can result in:

Penalties and interest
Increased HMRC scrutiny
Increased risk ratings for businesses already within the senior accounting officer (SAO) or business risk review (BRR) regimes

What you should do before 30 June 2026

If your business is part of a wider group with turnover exceeding €750m, you should:

Confirm whether the UK entity is within scope and establish which entity is responsible for UK Pillar 2 filings. This should be the “filing member” who should have already registered with HMRC
Ensure the responsible entity is aware of their UK Pillar 2 obligations and has registered with HMRC
Undertake calculations to confirm there is no UK top-up tax and review the relevant elections to be made
Determine where the GIR will be filed and confirm whether there is an information sharing agreement in place between that jurisdiction and the UK
Ensure the necessary data is available to file the UK returns. This may require coordination with group tax
Engage advisers with the right software and expertise to support your filing obligations.

How we can help

Our international team has spent the last 18 months advising clients on Pillar 2 readiness. The team has also invested in commercial Pillar 2 software that integrates with HMRC’s systems.

This is particularly important as:

Only commercial software compatible with HMR systems can be used
Manual or spreadsheet‑based solutions are not sufficient for UK submission
Specialist knowledge is required, even where returns are expected to be nil

We currently act for many UK entities within large multinational groups and expect Pillar 2 compliance to become a part of the annual compliance cycle.

Speak to us

If you believe your business may be affected by Pillar 2 – or if you are unsure – please contact one of our international tax experts as soon as possible.

Early engagement allows us to:

Confirm your UK obligations
Coordinate with group tax teams where needed
Ensure filings are completed accurately and on time

Pillar 2 is new, complex, and here to stay. Taking action now will help avoid unnecessary risk and last‑minute pressure as the 30 June 2026 deadline approaches.