WellTax Blog

HMRC Cracks Down on Electronic Sales Suppression: What Businesses Need to Know

HMRC has recently begun sending letters to businesses who may have misused their till systems and failed to pay the correct amount of income tax, corporation tax, or VAT.

These letters are part of a campaign to give businesses using electronic sales suppression (ESS) an opportunity to voluntarily disclose any undeclared sales and get their tax affairs in order.

ESS is the use of tools such as software to deliberately manipulate electronic sales records and hide the value of individual transactions. This can result in a reduction of turnover and a corresponding reduction in tax liability. HMRC’s campaign is likely to continue for at least the coming year.

Two different versions of the letter will be used to determine the best approach going forward. This follows on from a voluntary disclosure service that was open until 9 April for businesses to voluntarily disclose their use of ESS to evade paying taxes.

Businesses who receive these letters are encouraged to come forward and disclose any undeclared sales to HMRC. Failure to do so could result in penalties and other consequences.

Domenico Santomasi

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