Till fraud targeted by HMRCSource: HM Revenue & Customs | | 09/06/2022
In the Autumn Budget 2018, the government announced that they would launch a call for evidence to learn more about the nature and scale of till fraud. This specifically looked at businesses that deliberately undertake electronic sales suppression (ESS). ESS occurs when a business deliberately manipulates its electronic sales records in order to hide or reduce the value of individual transactions.
This type of fraud is hard to spot as it aims to reduce the recorded turnover of the business and the corresponding tax liabilities, while providing what appears to be a credible and compliant audit trail.
At Spring Budget 2021, the government announced that new powers would be introduced to tackle ESS. These new powers were included in the Finance Act (2022) introduced in February this year.
HMRC officers have now started to target businesses across the country that are suspected of being involved in making, supplying or promoting ESS systems. These businesses now face fines of up to £50,000 and criminal investigations. HMRC is also actively targeting users of these systems who will also face having to pay back tax evaded, financial penalties and possible criminal convictions.
On 18 May 2022, 30 businesses were visited, including shops, takeaways and restaurants, across nine counties and two men and a woman were arrested in Nottinghamshire as part of a criminal investigation into the alleged supply of ESS software.