Even with a new international minimum tax rate being implemented, the scale of risks posed by large multinationals diverting profits across borders remains significantly high. International tax risks, including businesses artificially shifting their profits to lower-tax jurisdictions, account for £21 billion of the tax under consideration in HMRC’s investigations into large businesses. These risks are common to many countries and HMRC has therefore been working with international partners and the Organisation for Economic Cooperation and Development (OECD) to develop clear legislation and guidance related to international taxation. Central to these efforts is Pillar 2, which applies a minimum Corporation Tax rate on the largest multinationals. Pillar 2 is expected to impose significant added complexity and administrative burdens across these businesses, with one-off costs of £13.7 million, and recurring costs of £8.2 million a year. HMRC says it is providing greater support to large businesses and is working with them to understand where compliance burdens might be minimised. However, the benefits of Pillar 2 will likely be reduced by the recent agreement negotiated by the US with OECD partner countries, which excludes US-headquartered companies from Pillar 2 calculations. HMRC estimates that this will reduce the taxes brought in by Pillar 2 by £600 million a year, down to £1.6 billion. recommendation In its update to the Committee in 12 months, HMRC should set out the results and analysis from the first returns from businesses meeting their Pillar 2 reporting requirements. This should include: a. the filing rate, and any work underway with those businesses who have failed to provide returns; and b. insights gained on the scale and nature of international tax risks and how these can be better tackled.