Disclosure facility for coming clean on till fraud closes on 5 January warns BDO

Disclosure facility for coming clean on till fraud closes on 5 January warns BDO

Businesses thinking of coming clean over their use of Electronic Sales Suppression (ESS) software must register by 5 January if they plan to take advantage of HMRC’s disclosure facility, although other disclosure routes may still be available, accountancy and business advisory firm BDO has advised.

ESS till systems seek to manipulate takings in order to reduce a business’ tax bill. While sales are put through the till as normal, the ESS systems allow records to be manipulated by deleting sales and routing card payments through offshore banks.

HMRC opened a special disclosure facility on 8 December 2022 for businesses that have used ESS systems. This followed the news that HMRC officers had visited 90 businesses across England, Scotland and Wales as part of a global investigation into ESS systems which are thought to have been used by thousands of businesses.

Affected businesses have until 5 January 2023 to register their intention to use the facility, and disclosures must be made between 6 January 2023 and 9 April 2023. HMRC has advised that this voluntary disclosure route will allow businesses to correct their records and pay the right tax. It also warned that those who don’t come forward could receive more severe penalties.

However, BDO has advised there are other routes for businesses to disclose their use of such systems which may also offer the benefit of immunity from criminal prosecution.

Jon Claypole, a tax dispute resolution partner at BDO explains:

“HMRC has been working to crack down on this type of till fraud for some time. Last year’s arrests and the targeting of businesses thought to have used these ESS systems shows the tax authority is serious about tackling this type of activity.

“While HMRC’s disclosure facility is one option for affected businesses, the fact that it was extremely time-limited may mean very few businesses actually come forward. However, there are other disclosure routes, in particular the contractual disclosure facility or 'Code 9' route which may offer immunity from prosecution. We would certainly advise all affected businesses to seek appropriate advice so they can regularise their tax affairs and pay what is due.”


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Frank Shepherd
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