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HMRC target till fraudsters

HMRC is cracking down on till fraud, particularly where businesses are suspected of using Electronic Sales Suppression (ESS) tools.  This article sets out how businesses need to disclose and correct any irregularities.

12 Dec 2022
Clare Halligan, Dominic Arnold
Clare Halligan, Dominic Arnold
Authors
  • Clare Halligan, Dominic Arnold
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During early December 2022, HMRC visited 90 business in England, Scotland and Wales as part of an internationally co-ordinated crackdown on till fraud. Similar action was taken in the US and Australia, who with the UK, Canada and the Netherlands are part of the J5 alliance tackling trans-national tax crime.

In the UK 5 arrests were made on suspicion of various tax fraud and money laundering offences.

The businesses are suspected of using Electronic Sales Suppression (ESS) tools to manipulate their takings and evade paying tax. HMRC says it has identified thousands of potential users who it now expects to come forward and pay any taxes due.

HMRC has already set up a disclosure opportunity for businesses who have committed till fraud. Those who need to make a disclosure have until only 5 January 2023 to tell HMRC and the disclosure must then be made by 28 February 2023. HMRC is also encouraging those who know someone who has committed till fraud to report them via their fraud hotline.

HMRC will contact those who register by 6 January 2023 to tell them what they need to do, which will include providing:

  • The submission reference number
  • Total sales for the period the ESS tools were used
  • Total sales not declared for the period ESS tools were used
  • Unique taxpayer reference (if self employed)
  • VAT registration number (if applicable)
  • Corporation tax reference (for Limited Companies)

If the till fraud disclosure is not made on time, HMRC will begin an investigation into the business.

HMRC will also follow up with businesses who do not make a disclosure.  They may face higher penalties and possible criminal prosecution.

FAQ’s

I have been using ESS tools. What should I do?

You must act quickly to register with HMRC to make a disclosure of till fraud, by 5 January 2023. Unless you already have, you must stop using the ESS tools immediately.

Will HMRC agree not to prosecute me if I make a full disclosure?

HMRC has not given any assurances regarding criminal prosecution. In certain circumstances it may be more appropriate to make your till fraud disclosure under HMRC’s Code of Practice 9 procedure, which can provide such an assurance for full disclosure.

I have other tax irregularities to disclose – what should I do?

HMRC will expect you to disclose all tax owed as part of any disclosure. It is likely that HMRC will ask you to certify that you have made a full and complete disclosure as part of a civil settlement agreement.

How can Evelyn Partners help me?

Evelyn Partners has a dedicated Tax Dispute Resolution team who have a wealth of experience in making disclosures to HMRC. We can advise on your options quickly and confidentially and support you in correcting your tax affairs.

You can speak to us at any time on 0800 008 6816 or 0203 8334 101 or email us at taxdisputes@evelyn.com

Approval code: NTAJ14122274

By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. This briefing does not constitute advice nor a recommendation relating to the acquisition or disposal of investments. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication.

Tax legislation

Tax legislation is that prevailing at the time, is subject to change without notice and depends on individual circumstances. You should always seek appropriate tax advice before making decisions. HMRC Tax Year 2023/24.