Pillar Two: assessing the impact on the UK FTSE 100

The expected impact of the new Pillar Two regime is starting to unfold as the first UK groups have filed their calendar year-end consolidated accounts. Pillar Two disincentivises multinational corporations to move to low tax jurisdictions and should help to level the playing field. Based on the authors’ analysis of FTSE 100 companies with a calendar year-end, reporting their YE 2023 results, 90% of the population reviewed expect to be within Pillar Two – and the authors estimate anticipated top-ups for those groups who disclosed a quantification of potential top-up tax could be in the region of £440m, roughly a 3% average anticipated increase in current year current tax for these groups. However, very little of the top-up tax disclosed by the FTSE 100 groups will result in increased tax revenues for HMRC.