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HMRC cracks down on till fraud with £50,000 fines

Home » News » HMRC cracks down on till fraud with £50,000 fines

Businesses involved in making, supplying or promoting Electronic Sales Suppression (ESS) systems that help businesses hide or reduce the value of till sales, now face fines of up to £50,000 and criminal investigations.

New powers introduced in February to target the tax evasion practice mean users can also face fines.

Two men and a woman have already been arrested in Nottinghamshire as a result of the new powers and are now subject to 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 where computers, digital devices and paperwork were seized. All three suspects have been released under investigation.

As part of the same investigation, HMRC also visited 30 businesses, including shops, takeaways and restaurants.

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.”

Marc Gill, HMRC’s director of individuals & small business compliance, said: “Electronic Sales Suppression gives the appearance a business is trading legitimately, when in fact they’re really just stealing money from taxpayers.

“We encourage anyone using, supplying, making or promoting ESS to report via our disclosure facility. Making a disclosure is not only the right thing to do it could also lead to a reduction in financial penalties.”

ESS users will either have access to specialist software or will configure their Electronic Point of Sale (EPOS) device in a specific way that allows them to consciously 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.

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