Electronic sales suppression (ESS) is the practice of deliberately not declaring cash sales.

ESS happens when the sales till is programmed to hide or reduce the value of individual sales.  For example, the electronic point of sales (EPOS) software may deliberately exclude certain items from the sale records.  Alternatively, the EPOS may be operated in certain periods, allowing the sale to be rung up but excluding it from the daily takings.  The total sales recorded by EPOS should agree with the cash and card sales taken.

Those businesses deliberately undertaking electronic sales suppression (ESS) will be liable for penalties and will have to remove the ESS software from their electronic point of sale (EPOS) systems.

HMRC is about to gain new powers to investigate ESS.  HMRC will have powers to obtain details of ESS software developers’ source code and the structure of data within an EPOS system.  Those making, supplying or promoting ESS software or hardware could receive a penalty of up to £50,000.   Those found in possession of ESS software could be fined £1,000, rising to £50,000.

All these powers will be included in the Finance Bill 2022 and will take effect when that Bill is passed in summer 2022.