HMRC arrests three persons for till fraud

HM Revenue and Customs (HMRC) officers arrested three persons as part of a criminal investigation into the alleged supply of Electronic Sales Suppression (ESS) software.

The officers visited 30 businesses, including shops, takeaways and restaurants, across nine counties on 18 May in a day of action after new powers were introduced in the fight against till fraud.

Businesses involved in making, supplying or promoting the ESS systems that help users hide or reduce the value of till sales, now face fines of up to £50,000 and criminal investigations. Users also face fines as HMRC increases efforts to target the tax evasion practice.

“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,” Financial Secretary to the Treasury Lucy Frazer said.

“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.”

Two men, aged 43 and 58, and a 56-year-old woman were arrested in Nottinghamshire 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.

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

“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.

HMRC has a voluntary disclosure facility and would encourage anyone using, making, supplying or promoting ESS to contact them. By making a disclosure now those using or benefitting from ESS could see their financial penalties reduced.