Select committee: Public Accounts Committee
Conclusion 28
9th Report - Large business tax compliance
Published 10 Jul 2026
Addressed to HM Treasury
Public Accounts Committee Large business tax compliance All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Conclusion (the committee's words)
In January 2026, countries signed up to Pillar 2 negotiated a ‘side-by-side’ agreement with the United States (US). As a result, US-headquartered businesses, and their foreign subsidiaries, will remain subject to US minimum tax rules.43 We asked HMRC what impact this was likely to have on large business tax compliance in the UK. HMRC forecasts that the side-by-side agreement will reduce the tax benefit to the UK of Pillar 2 by £600 million a year, down to £1.6 billion.44 HMRC told us that it does not expect the agreement to impact the level of tax compliance in the UK, nor does it have any indication that it will increase the cost of compliance to businesses.45 38 C&AG’s Report, para 2.7 39 Q 53 40 HM Revenue and Customs, Multinational top-up tax and Domestic top-up tax: UK adoption of OECD Pillar 2, March 2023 41 Q 53 42 Q 53 43 C&AG’s Report, para 2.7 44 Q 57 45 Qq 60-61 15 Complexity in the tax system
From: Public Accounts Committee, 9th Report - Large business tax compliance (HC 86), 10 July 2026
Government response
The government responded to the whole report on 1 October 2026 (deadline 10 September 2026).