Since 3 June 2024, HMRC launched another one-to-many (OTM) letter campaign, this time specifically aimed at businesses suspected of using till systems to hide or reduce transaction values. This practice is known as electronic sales suppression (ESS), which involves manipulating electronic point-of-sale (EPOS) systems to lower reported sales and tax liabilities.
In the letters, HMRC encourages businesses to voluntarily disclose their unreported sales, preferably through the Contractual Disclosure Facility (CDF). The letters also detail the penalties and further actions if income suppression continues, including full audits and/or civil or criminal investigations.
Electronic sales suppression was first identified during the pandemic when businesses used EPOS to support claims to the Coronavirus Job Retention Scheme (CJRS), leading to targeted nudge letters in 2022. However, these letters saw limited response, with only about one in seven businesses responding.
This prompted HMRC to take a more robust approach through the Fraud Investigation Service (FIS). FIS’ involvement highlights HMRC’s intensified efforts against this fraud. Businesses are urged to come forward voluntarily to secure reduced settlements and avoid harsher penalties. HMRC also encourages anyone with information about ESS fraud to report it online.
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