HM Revenue and Customs (HMRC) officers visited businesses across the country and arrested three people in a day of action following the implementation of new powers in the fight against till fraud.
Businesses that manufacture, supply, or promote Electronic Sales Suppression (ESS) systems that assist users in concealing or reducing the value of till sales now face fines of up to £50,000 and criminal investigations. Users may also face fines as HMRC ramps up its efforts to combat tax evasion.
On May 18, 2022, 30 businesses were visited across 9 counties to combat ESS, and two men and a woman were arrested in Nottinghamshire as part of a criminal investigation into the alleged supply of ESS software.
On May 18, 2022, 30 businesses were visited across 9 counties to combat ESS, and 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 woman, aged 56, on suspicion of fraud and defrauding the government.
HMRC officers executed a search warrant at three different addresses, seizing computers, digital devices, and paperwork. All three suspects have been released pending further investigation.
Lucy Frazer, Financial Secretary to the Treasury, stated:
“The vast majority of businesses pay their taxes and, rightly, expect HMRC to intervene where necessary to ensure a level playing field for all.”
“Tax evasion does not stop, and neither do we; the new powers available to HMRC enable them to crack down on ESS and help recover tax revenues to fund our critical public services.”
HMRC’s Director of Individuals and Small Business Compliance, Marc Gill, stated:
“Electronic Sales Suppression gives the appearance that a business is operating legally, when in fact it is stealing money from taxpayers.”
“We encourage anyone who uses, supplies, manufactures, or promotes ESS to report through our disclosure facility.” Not only is making a disclosure the right thing to do, but it may also result in a reduction in financial penalties.”
ESS users will either have access to specialised software or will configure their Electronic Point of Sale (EPOS) device in a way that allows them to consciously conceal true sales and the resulting tax.
Sales processed through the till appear to have been recorded normally, but the end of day report is purposefully manipulated behind the scenes to reduce reported takings.
HMRC can recover tax evaded and launch investigations that could result in criminal convictions as part of its investigations into ESS.
HMRC has a voluntary disclosure facility and would like to hear from anyone who is using, making, supplying, or promoting ESS. Those who use or benefit from ESS who make a disclosure now may have their financial penalties reduced.
