Single entities and groups within the scope of the UK Pillar Two rules are required to disclose relevant information regarding the application of these rules. This includes the calculation of any Pillar Two top-up taxes, which must be disclosed to HMRC through the appropriate returns.

Single entities and groups within the scope of the UK’s Pillar Two rules are required to register with HMRC. Our article on UK Pillar Two registration requirements outlines the steps you need to take to register.

What returns do I need to file under the UK Pillar Two rules?

An entity within the scope of the UK Pillar Two rules must file both a global anti-base erosion (GloBE) information return (GIR) and a UK self-assessment return, even if no Pillar Two top-up tax is payable.

The GIR is a standardised return that discloses information about the group and the application of the Pillar Two rules. It also discloses the effective tax rate and top-up tax computations, as well as any applicable safe harbour and exclusion provisions.

If the GIR is filed overseas, and the group expects the foreign tax administration to provide it to HMRC, it must file an overseas return notification (ORN) in the UK, which states where the GIR has been filed.

The self-assessment return discloses the total top-up tax liability of the group, as well as the liability for each UK entity. As these filings will form a key part of your organisation’s audit evidence, it is important to understand how the Pillar Two rules interact with the statutory audit process.  Our article on Pillar Two and the statutory audit process outlines what you need to know and how we can support your UK Pillar Two compliance.

When do I need to file the returns and what is the deadline for any top up taxes?

Both returns must be filed within 18 months after the end of the first accounting period in which the UK Pillar Two rules apply. For subsequent periods, returns must be filed within 15 months after the end of the relevant accounting period. Special rules apply to short accounting periods, which may affect the filing deadline. The deadline for paying top-up tax is aligned with the filing deadline.

Missing a deadline may result in penalties, including initial fixed amounts starting at £100 per return, followed by additional fixed penalties and tax geared penalties of up to 20% of the unpaid tax.

You may also need to file returns in other jurisdictions, depending on where your group operates. We can help you understand the compliance requirements across different countries and ensure you remain globally compliant.

For more information, please contact our Pillar Two team, Sarah Hall and Kaila Engelsman.

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