Till Fraud the Crackdown Continues.

Are you misusing your till to evade tax? HMRC are making serious wave in the crackdown on till fraud

An ongoing effort to combat till fraud practices in electronic tills has resulted in targeted visits to over 20 takeaways and restaurants in various locations across Britain. Edinburgh, London, St Helens, and Stoke were among the areas where these unannounced visits occurred in the past four weeks, marking a crackdown on electronic till fraud orchestrated by HM Revenue and Customs (HMRC) officers.

HMRC’s Fraud Investigation Service initiated criminal investigations, conducting three interviews under caution this month involving individuals from Stoke and St Helens. The focus of these actions is to address the use of Electronic Sales Suppression (ESS) tools, software, or devices altering electronic point-of-sale records. This manipulation allows businesses to underreport sales, consequently evading tax obligations.

We wrote about HMRCS crack down on electronic sales suppression and till fraud early this year

The agency highlights that a small fraction of takeaways and restaurants in the UK resort to employing ESS tools to modify electronic sales records. Those engaging in this practice are strongly encouraged to reach out to HMRC promptly to disclose their involvement. Delaying disclosure may lead to higher financial penalties. Since May 2023, HMRC has received over 50 voluntary disclosures from businesses regarding their undeclared sales.

Marc Gill, HMRC’s Director of Individuals & Small Business Compliance, emphasized the severity of this fraudulent activity, stating, “ESS tools create a facade of legitimate trading while siphoning off tax revenues crucial for funding public services. We possess advanced means of detecting such fraud, and individuals associated with the use, supply, creation, or promotion of ESS tools may face fines up to £50,000 or criminal prosecution.”

Gill urged those implicated to use HMRC’s disclosure facility available on gov.uk rather than waiting for contact from the agency, highlighting that early cooperation might result in reduced financial penalties.

ESS tools typically encompass hardware or cloud-based software enabling businesses to manipulate income records. Although sales are processed through the till as usual, these systems permit record alteration, including deletion of sales and linking to domestic or offshore payment platforms.

HMRC investigates ESS usage within the takeaway and restaurant sector using various sources, such as bank account and transactional data from online food ordering platforms, cross-referencing against declared records.

Beyond a voluntary disclosure form, HMRC encourages individuals with information regarding ESS or any form of tax fraud to report it through their online channels.

Do you remember our first till fraud article on the pizza guy we wrote about in 2021? No well read on here.

Edge Tax have a proven track record in helping clients that have made mistakes on their tax returns and need to make a disclosure. Telling HMRC before an enquiry is opened usually means the situation is resolved with lower penalties and at less cost to you.

From HMRCs perspective disclosures are attractive, they shift the workload towards the taxpayer (or their agent), leaving them to simply check the details provided. From the taxpayer’s perspective, disclosures are preferable to waiting until HMRC opens and enquiry or investigation. It gives the taxpayer the opportunity to mitigate the penalties that would be imposed.

We can assist where you need to put things right, whether HMRC have been in contact, or not.

• We understand that things go wrong and are non-judgemental in reviewing the behaviours which may have lead to any underpayment of tax
• We are experts in dealing with tax investigations and can assist with the process from start to finish, liaising with HMRC on your behalf
• We provide easy to understand advice on your options
• We ensure that all HMRC correspondence, including the disclosure is completed and submitted on time, managing both yours and HMRC’s expectations
• Deal with all aspects of follow up work
• Provide full support and assistance representing you to HMRC
• Advise on making voluntary disclosure in relation to any tax fraud committed where appropriate
• Fixed fee proposals

If you have used your till system to, commit till fraud, reduce the recorded turnover of your business, HMRC want you to use this chance to get your tax affairs in order by making a voluntary disclosure. This is because if you have misused your till system, you may not have paid enough tax, for example income tax, VAT or corporation tax.

Contact a member of the team if you are concerned about till fraud and the implications for your business. Maybe you want to discuss getting your tax affairs in order

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