Many large businesses are approaching a significant new UK reporting deadline at the end of June 2026 following the UK’s adoption of the OECD’s Pillar Two global minimum tax rules. Broadly, these rules apply to groups with a global turnover in excess of €750m, irrespective of the size of their UK footprint.
What is catching many off guard is that UK filings are required even where no additional tax is payable, and that these filings cannot be completed using standard corporation tax software or simple spreadsheets.
Companies that fall within the scope of the Pillar Two rules will need to review their position to ensure compliance.
What is Pillar Two and who does it affect?
Pillar Two is a global framework designed to ensure that large business groups pay a minimum effective tax rate of 15% in each jurisdiction in which they operate.
In the UK, Pillar Two has been implemented through two new taxes - The Domestic Top‑up Tax and the Multinational Top‑up Tax.
Crucially, the size or profitability of the UK business is not the deciding factor. Even relatively small UK subsidiaries may fall within scope if they form part of a large international group.
Why is June 2026 so important?
For impacted groups with a 31 December 2024 year-end, the first UK Pillar Two filings are due by 30 June 2026. This is the first time these returns will be required in the UK, and for many groups, this is their first interaction with the UK Pillar Two compliance process.
The June deadline covers two key elements: confirmation of where the group’s Pillar Two calculations have been filed, and submission of a UK Pillar Two self‑assessment return.
Do UK filings really apply if no additional tax is due?
Yes. This is one of the most common misunderstandings. Even where no top‑up tax arises in the UK or elsewhere, UK filing obligations still apply. HMRC requires confirmation that the rules have been considered and that no liability arises.
In practice, many UK entities will still need to submit a UK Pillar Two self‑assessment return on a nil basis. Depending on the group structure, they may also need to notify HMRC that the group’s detailed Pillar Two calculations have been filed overseas.
Failure to file because “there is no tax to pay” can still result in penalties for non‑compliance.
What is an Overseas Return Notification?
In many multinational groups, the detailed Pillar Two calculations will be prepared centrally and filed by the ultimate parent company in its home jurisdiction.
Where the group’s GloBE Information Return is filed overseas in a jurisdiction that exchanges information with HMRC, the UK does not require a duplicate filing. Instead, HMRC must be notified through an Overseas Return Notification (ORN).
The ORN confirms the jurisdiction in which the return has been filed and which group entity submitted it. This allows HMRC to obtain the information through international exchange agreements. However, it is important to note that submitting an ORN does not remove the requirement to submit a UK Pillar Two self‑assessment return, which is a standalone statutory filing.
What does the UK Pillar Two self‑assessment return involve?
The UK Pillar Two self‑assessment return is separate from the standard corporation tax return and must be filed through HMRC’s Pillar Two reporting system.
The return confirms whether Domestic Top-up Tax or Multinational Top‑up Tax arises, how any liability is allocated across UK group members, or that no liability exists where this is the case.
All UK groups in scope are required to submit this return, including those with no tax payable.
Can Pillar Two filings be completed using normal tax software?
No. Pillar Two filings cannot be completed using standard corporation tax software, and HMRC does not provide a simple online form suitable for most groups.
In practice, these filings usually require specialist Pillar Two software that can handle the underlying data requirements and HMRC’s technical submission format.
This software requirement is another reason why groups that expect no tax liability should not assume that compliance will be straightforward.
What should UK businesses be doing now?
With the June 2026 deadline approaching, affected UK businesses will need to confirm where the group’s Pillar Two calculations will be filed, identify which UK returns will be required, and ensure appropriate systems and processes are in place to support submission.
Although Pillar Two compliance is often led by the parent entity of the group, UK directors remain responsible for ensuring local filing obligations are met.
Pillar Two is not simply about paying additional tax. It introduces entirely new UK filing obligations that apply even when no tax is due and require specialist systems to complete. Now is the time to ensure you will be ready for the additional filing requirements to avoid last‑minute issues and potential penalties.
If you would like further advice and support, please call 0808 144 5575 or email help@armstrongwatson.co.uk.
