HM Revenue & Customs Electronic Sales Suppression (ESS) FAQs
September 18, 2024
Electronic sales suppression (ESS), also known as till fraud, is where a business manipulates electronic sales records to hide or reduce the value of sales.
This is done through misusing built-in till functions or installing software and hardware specifically designed to suppress sales.Misusing a till system reduces the recorded turnover of the business and the amount of tax a business should be paying, whilst providing what appears to be an accurate and complete record.
Q: What are HMRC doing to tackle till fraud?
The new information powers available to HMRC allow them to clamp down on till fraud and help recover tax to fund our vital public services.
HMRC have sophisticated ways of detecting till fraud and anyone using, supplying, making or promoting ESS tools can face fines of up to £50,000 and criminal prosecution.
To investigate ESS in the takeaway and restaurant sector, HMRC uses third party information, including bank account and transactional data from online food ordering platforms, to check against what has been declared.
As well as the launch of criminal investigations, HMRC conduct unannounced visits to businesses as part of their crackdown on till fraud.
Those involved are urged to contact HMRC now, before their wrongdoing is detected.
Q: HMRC asks business owners to take reasonable steps to protect themselves from being involved with till fraud – can you give us examples?
When purchasing an electronic point-of-sale (EPOS) system for your business, make sure you exercise due diligence and thoroughly research a product before purchasing. Make sure your EPOS system meets your business needs and complies with the law.
Business owners should not under-report sales, as this is a form of sales suppression. By taking part you are avoiding your tax obligations and stealing taxpayers’ money. If what your business is doing doesn’t feel right, then it probably isn’t.
Check GOV.UK to make sure your business is compliant with the law and keep accurate records of your business transactions. Take care to correct errors if they happen.
Q: If my business misuses our till, what could happen?
By misusing your till system, you are stealing taxpayer’s money. HMRC may open an investigation, issue an assessment, and apply financial penalties.
As part of investigations into till fraud, HMRC will recover tax evaded and may launch investigations that could result in criminal convictions.
Q: Why should I make a disclosure that I’ve been misusing my till system?
By voluntarily disclosing and stopping use of ESS tools, your financial penalties could be reduced. So, the earlier you come forward, the better. Don’t wait for us to contact you. If you delay in telling us, or give misleading answers, you could face higher financial penalties and a full investigation which may include a criminal conviction.
Q: I’ve been misusing my till, what do I do?
Please come forward and use the online process on GOV.UK to make a voluntary disclosure, and stop using your ESS tools immediately.
Q: I think a business might be misusing their till, but I can’t be sure, what do I do?
If you suspect a person or business is involved in till fraud, please report it online. You do not have to give your name or contact details unless you want to. Any information you give will be kept private and confidential.
Q: Why should I report till fraud?
HMRC is committed to creating a level playing field for all businesses. You can help prevent dishonest traders from gaining an unfair advantage and undercutting your business by reporting it online.
Q: Where do I find more information on ESS?
You can find electronic sales suppression guidance on GOV.UK. This includes our factsheet CC/FS68 which tells you about till fraud. It explains what powers we can use to help us identify and tackle till fraud. It also explains the penalties we may charge if you are involved. You can make a disclosure about using ESS tools using the online process on GOV.UK.
