Pillar 2 Top-up Taxes (Multinational and Domestic)

The UK has introduced new Pillar 2 Top-up Taxes as part of a global initiative to ensure large multinational groups pay a minimum level of tax. If your business is part of a group with consolidated revenues of €750 million or more, you may need to register and report these taxes, even if no tax is ultimately due.

What are Pillar 2 Top-up Taxes?

Pillar 2 is a global minimum tax system that applies to very large business groups. There are two separate taxes in the UK:

Domestic Top-up Tax applies to groups that only have entities located in the UK.

Multinational Top-up Tax applies to groups with entities both inside and outside the UK.

These taxes operate at group level, meaning one company (the "filing member") registers and reports on behalf of all group members for both taxes.

Who needs to register?

Your group must register for Pillar 2 Top-up Taxes if it has:

• At least one entity located in the UK
• Consolidated group annual revenues of €750 million or more in at least 2 of the previous 4 accounting periods

The term "groups" includes single entities that meet these criteria.

You must register even if you don't expect to pay any top-up tax. Registration must be completed no later than 6 months after the end of the group's first accounting period that met the criteria.

Who is the filing member?

Only the filing member can register on behalf of the group. This will be either:

• The Ultimate Parent Entity (the entity at the top of the group ownership structure that is not a subsidiary of any other entity)
• Another group member nominated by the Ultimate Parent Entity (for example, groups with an overseas Ultimate Parent Entity may nominate a UK group member)

Agents and tax advisers cannot register on a group's behalf.

What information you'll need to register

To complete registration, you'll need:

• The name and registered address for the Ultimate Parent Entity
• The name and registered address for the filing member (if different from the Ultimate Parent Entity)
• Company registration number and Unique Taxpayer Reference (if either entity is a UK limited company or limited liability partnership)
• Whether the group has entities only in the UK or in the UK and other jurisdictions
• The start and end date of the group's accounting period
• Contact details for one or two individuals or teams in the group
• A contact postal address for the group

You'll also need an organisation Government Gateway user ID and password. You cannot use an individual or agent Government Gateway user ID.

When to report

Once registered, you must submit your returns by specific deadlines:

• First accounting period: 18 months after the end of the accounting period
• Second period onwards: 15 months after the end of the accounting period

You must submit your UK tax return along with one of the following:

• Information Return
• Overseas Return Notification

Your Pillar 2 Top-up Taxes dashboard (accessed through your business tax account) shows due dates and any overdue returns.

If you miss the deadline, you may face penalties.

How to report

You must use compatible software to submit Pillar 2 Top-up Taxes returns. HMRC cannot accept manual submissions.

HMRC is working with software developers to create suitable products for Pillar 2 reporting. You'll need:

• Your Pillar 2 ID (a 15-character reference starting with X, provided when you register)
• Access to third-party software that offers Pillar 2 services

Below-Threshold Notification

If your group's circumstances change and it no longer meets the threshold, you can submit a Below-Threshold Notification from your Pillar 2 dashboard. You can do this if the group:

• Does not have consolidated annual revenues of €750 million or more in at least 2 of the previous 4 accounting periods
• Is not expected to make consolidated annual revenues of €750 million or more within the next 2 accounting periods

When to pay

Payment deadlines depend on when your first reporting period ends:

• 30 June 2026 if the first accounting period you're required to report ends on or before 31 December 2024
• 18 months after the last day of the accounting period if the first period ends after 31 December 2024
• The later of 30 June 2026 or 15 months after the last day of the accounting period for all other periods

If the deadline falls on a weekend or bank holiday, payment must reach HMRC by the end of the previous working day.

Late payments may incur interest charges.

How to pay

You can pay Pillar 2 Top-up Taxes by:

Online through your bank account: Approve a payment through your online or mobile banking. Payments are instant but can take up to 2 hours to show in your account.

Bank transfer:

• CHAPS or Faster Payments: received same or next working day
• Bacs: allow 3 working days

For UK bank accounts:

• Sort code: 08 32 10
• Account number: 12001020
• Account name: HMRC Shipley

For overseas accounts:

• IBAN: GB03 BARC 2011 4783 9776 92
• BIC: BARCGB22
• Account name: HMRC Shipley

Make all payments in pound sterling (GBP). Your bank may charge you for using other currencies.

By cheque: Allow 3 working days. Make payable to 'HM Revenue and Customs only', write your reference number on the back, and send to: HMRC Direct, BX5 5BD.

You must use your Pillar 2 ID reference (the 15-character number starting with X) when making payments. Using an incorrect reference will delay allocation of your payment.

Managing your account

After registration, you can access your Pillar 2 dashboard through your business tax account to:

• Manage your account details
• View returns made and due
• View payments made and due
• Submit a Below-Threshold Notification
• Replace the filing member if needed

Sources

• Check if you need to report Pillar 2 Top-up Taxes
• Register to report Pillar 2 Top-up Taxes
• How to report Pillar 2 Top-up Taxes
• Pay Pillar 2 top-up taxes (Domestic Top-up Tax and Multinational Top-up Tax)

This article provides general guidance based on current HMRC rules. For advice specific to your situation, speak to your accountant.