Upcoming HMRC registration deadline for some large businesses
Multinational groups which have a presence in the UK and a global turnover of €750m or more will be required to register with HMRC via a dedicated portal by 30 June 2025 as part of new compliance requirements introduced following Pillar 2 guidance.
A multinational group is required to register if it has:
- One or more UK entities; and
- Global turnover of €750m or more in at least 2 of their past 4 accounting periods.
A UK branch is treated as an entity for these purposes. In other words, merely having a UK branch will bring a multinational group within the scope of registration with HMRC.
What is Pillar 2?
Pillar 2 is part of the Organisation for Economic Cooperation and Development (OECD)/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) which introduced a global minimum tax rate of 15% across multiple jurisdictions for accounting periods beginning on or following 31 December 2023. This was introduced to ensure that large multinational groups pay a minimum level of tax regardless of the jurisdiction in which they operate.
How has Pillar 2 been adopted in the UK?
In the UK, two new taxes were introduced as part of Pillar 2 being adopted; the multinational top-up tax (MTT) and the domestic top-up tax (DTT). If your group only has UK-based members, you only need to register for DTT, however, if your group contains members based inside and outside the UK, you must register for MTT and DTT.
MTT focuses on profits which UK parent members of multinational groups have in a non-UK jurisdiction which are taxed below the 15% minimum tax rate. As this is a top-up tax, the amount due is the amount which needs to be paid to reach the minimum rate. In areas where profits are taxed at 15% or more, there will be no additional tax to pay.
DTT is focused on UK based members of domestic or multinational groups. When their profits arising in the UK are taxed at below 15%, this top-up tax will be charged.
When is the deadline?
Regardless of whether there is any tax to pay, all groups with a UK presence (however small) but are part of a large group within the BEPS thresholds, must register with HMRC within 6 months of the end of the accounting period in which they came into scope.
If you had a 31 December 2024 year-end and meet HMRC’s requirements listed above, you must register with HMRC by 30 June 2025. Once registered, you must submit your returns to HMRC by 30 June 2026.
Who must register
The default position is that the Ultimate Parent Entity (UPE) must register directly with HMRC, therefore have its own “government gateway” account (the HMRC online portal). However, this may cause additional administration complications, therefore the UPE can nominate a UK entity to be its filing member within the UK. The UPE must formally nominate the UK entity to be its filing member in the UK.
We are here to help
If you have any questions about the upcoming deadline, would like some assistance from our transfer pricing team on BEPS Pillar 2, please get in touch with a member of our specialist team via the form below.
