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

The Organisation for Economic Co-operation and Development (OECD)’s Pillar 2 establishes a global minimum tax for large multinational enterprises (MNEs). The 30 June 2026 saw the first round of filings for in-scope groups with a December year end and provided insight into how the annual compliance process will work in practice.

As the deadline for groups with accounts drawn up to 31 March 2025 approaches, we have set out some of the common issues we have seen in practice and what needs to be done before the 30 September 2026 deadline.

For further detail on UK-specific filing requirements, including the role of the filing member and registration, read our insight on pillar 2 in the UK: FAQs on filing obligations.

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?

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. The key dates are as follows:

• HMRC registration deadline: 6 months after the first year the MNE falls in scope
• First UK filing deadline: 18 months after year end
• Ongoing deadlines: 15 months after the end of each accounting period.

This means the first UK Pillar 2 filing deadline for groups with an accounting period ended 31 March 2025 is 30 September 2026.

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:

1. 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
2. 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 top up tax is nil

Common issues we’re seeing

Now the first round of filings has been completed, we have identified the following common issues:

• UK members of large multinational groups assuming Pillar 2 filings are being handled entirely by an overseas group tax team
• Groups assuming that no action is required if there is no top-up tax to pay
• Delays obtaining information from overseas group companies
• Uncertainty over whether a UK Domestic Top-up Tax return is required where no tax is expected to be payable
• Groups being unaware an Overseas Return Notification (ORN) must also be filed using commercial software if the GloBE Information Return is being filed in another territory with an information sharing agreement with the UK
• Last-minute challenges with software and filing processes

Addressing these issues early can help avoid unnecessary pressure as filings deadlines approach.

What you should do before 30 September 2026

If your business is part of a wider group in scope of Pillar 2, you should:

1. Establish which entity is responsible for UK Pillar 2 filings. This should be the “filing member” who should have already registered with HMRC
2. Undertake safe harbour assessments and relevant Pillar 2 calculations to confirm there is no UK top-up tax
3. Determine where the GIR will be filed and confirm whether there is an information sharing agreement in place between that jurisdiction and the UK
4. Ensure the necessary data is available to file the UK returns. This may require coordination with group tax
5. 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 and supported many of them with their first UK return preparation and submission.

We can help with:

• Pillar 2 safe harbour assessments
• Pillar 2 calculation support and technical advice
• Coordination with overseas tax teams
• Preparation and submission of UK returns, including the self-assessment and ORN

Whether you are approaching your first filing deadline or establishing a long-term compliance process, we can help ensure your obligations are understood and met on time.

If your group has a 31 March 2025 year end and preparations for the 30 September 2026 deadline are not yet complete, now is the time to act.

Please contact one of our international tax specialists if you require assistance.