HMRC warns of £50,000 fines in crackdown on till fraud

HM Revenue and Customs (HMRC) has arrested three people after being given new powers to fight till fraud.

Businesses involved in making, supplying or promoting Electronic Sales Suppression (ESS) systems that help hide or reduce the value of till sales for tax evasion purposes now face fines of up to £50,000 and criminal investigations. Those using ESS software could also face fines.

On 18 May 2022, HMRC officers visited 30 businesses including restaurants, takeaways and shops across nine counties. Two men and a woman were arrested in Nottinghamshire as part of a criminal investigation into the alleged supply of ESS software.

The men, aged 43 and 58, were arrested along with a 56-year-old woman on suspicion of fraud offences and cheating the revenue.

A search warrant was executed by HMRC officers at three addresses and computers, digital devices and paperwork was seized. All three suspects have been released under investigation.

Financial secretary to the Treasury, Lucy Frazer, said: “The overwhelming majority of businesses are paying their taxes and rightly want to see HMRC stepping in where needed to ensure a level playing field for all.

“Tax crime does not stand still and neither do we – the new powers available to HMRC allow them to clamp down on ESS and help recover tax revenues to fund our vital public services.”

ESS users have access to specialist software or configure their electronic point of sale (EPOS) device to allow them to hide true sales and the resulting tax that is due.

Sales processed through the till give the impression they have been recorded as normal, however the end of day report is deliberately manipulated behind the scenes to reduce reported takings.

As part of investigations into ESS, HMRC can also recover tax evaded and launch investigations that could result in criminal convictions.

HMRC runs a voluntary disclosure facility and has encouraged anyone using, making, supplying or promoting ESS software to contact them. Those who do so could see their financial penalties reduced.

Disclosures can be made on Gov.uk here