The decision is detailed in the Treasury Minutes Progress Report released on 4 December 2025, which outlines the government’s progress in responding to recommendations from the Committee of Public Accounts (PAC). According to the report, the lack of an international agreement has made it impossible for the UK to proceed on its original timetable.
The UK government has confirmed that implementation of the OECD’s Pillar One rules will be delayed until 2027, extending its earlier 2024 target as international agreement on the reforms remains out of reach.
The decision is detailed in the Treasury Minutes Progress Report released on 4 December 2025, which outlines the government’s progress in responding to recommendations from the Committee of Public Accounts (PAC). According to the report, the lack of an international agreement has made it impossible for the UK to proceed on its original timetable.
The Digital Services Tax (DST), introduced in 2020 to tax turnover linked to value created by UK users on large digital platforms, was intended to be repealed once Pillar One took effect. However, with negotiations at a standstill, the tax will remain in place. The DST currently applies to online marketplaces, social media platforms and search engines, and is expected to generate about GBP 3 billion in 2024/25. HMRC data also shows receipts of more than GBP 800 million for 2024–25.
The PAC notes that despite signals from the G7 in June 2025 and the G20 in July 2025 that talks on digital economy taxation could resume, no concrete progress has been made. The committee warns that continued uncertainty could significantly affect the DST’s future, especially given that UK law requires the tax to be reviewed by 2025.
The PAC has recommended that HMRC update Parliament within three months of any international agreement on Pillar One, setting out how the UK plans to implement the reforms. The government says it agrees with this recommendation and has formally adjusted its implementation target to 2027.
The Treasury Minutes Progress Report also outlines developments in other areas of government work, including updates on zero-emission vehicle standards, border processes following the UK’s exit from the EU, reforms under the Renters’ Rights Act, the HS2 programme reset, NHS capital planning, asylum accommodation changes and progress on digital transformation projects across multiple departments.
