In October 2021, the 136 countries which make up the Organisation for Economic Co-operation and Development (OECD) inclusive framework agreed upon a set of reforms which were designed to manage the taxation of multinational companies at the international level.

These measures are broken down and referred to as pillar one and pillar two. Pillar one will control where a multinational group pays tax and involves a partial reallocation of taxing rights over the profits of large multinationals to the jurisdictions in the geographical location of their consumers. Pillar two looks to ensure that the multinationals pay a minimum tax rate in each jurisdiction in which they operate. This is to be achieved through the Global anti-Base Erosion (GLoBE) rules, a framework which regulates how much tax is paid by multinational groups.

Simply put; pillar one is where tax is to be paid, pillar two is how much tax is to be paid.

A consultation by the government on the implementation of pillar two in the UK was completed on 4th April 2022 and, ahead of the formal findings and response due this Summer, Lucy Frazer (the Financial Secretary of the treasury) sent an interim update to respondents which outlined that the start date of the regulations will be pushed back from 1st April 2023 to accounting periods beginning on or after 31st December 2023. The reason for this delay is the acknowledgement that a sufficient lead-in time is required before the UK can effectively implement the new rules. Additionally, there are potential disadvantages to UK businesses on both competitive and administrative levels should the UK implement the GLoBE rules ahead of other countries.