Electronic Sales Suppression (ESS) occurs when a business either acquires, or gains access to, software that will assist it to under-report its sales, while still providing an apparently reliable audit trail.

In early 2022, HMRC visited 30 businesses including shops, takeaways, and restaurants across nine counties to tackle ESS. Following that action, three people were arrested and subsequently released pending further investigation.

Under laws bought in last year, businesses engaged in supplying or promoting ESS systems can be liable to penalties of up to £50,000. Those found in possession of an ESS ‘tool’ can also be fined up to £1,000. While this second fine might seem low, it is likely that anyone who has used such a tool could expect further enquiries from HMRC leading to recovery of any unpaid tax and penalties for fraudulent and inaccurate returns.

However, HMRC are now giving those who have been involved in ESS an opportunity to come forward and make a full disclosure by 9 April using their new ESS Disclosure Facility.  Failure to use the service could result in higher penalties or even (in the most heinous cases) a possible prosecution.

 

This article reflects the position at the date of publication (23 January 2023). If you are reading this at a later date you are advised to check that that position has not changed in the time since.