Electronic Sales Suppression — the deliberate hiding of takings through manipulated till software — is firmly in HMRC’s sights. On 23 June 2026 the government launched a consultation that could reshape the point-of-sale industry itself, proposing mandatory software standards for electronic and mobile till systems to stamp out so-called “till fraud”. For any business that takes payments through an EPOS or MPOS system, this is a development worth understanding now, while the consultation is still open.
What Is Electronic Sales Suppression?
Electronic Sales Suppression (ESS) — often called till fraud — is the deliberate manipulation of digital sales records to hide takings and understate turnover, all while producing a plausible audit trail. Common techniques include deleting or cancelling genuine sales, misdescribing VAT-standard items as zero-rated, or running a second “shadow” till during compliance checks. The result is under-declared VAT, income tax and corporation tax, and an uneven playing field for the honest majority of businesses.
What HMRC Is Proposing in the EPOS/MPOS Consultation
Rather than pursuing individual businesses alone, HMRC now wants to tackle the problem at source: the software. The consultation seeks views on introducing mandatory standards — such as modern encryption and standardised, tamper-resistant record-keeping — across the EPOS and MPOS sector. The aim is to make suppression tools far harder to build, sell or hide inside otherwise legitimate till systems. It builds on the government’s 2018 Call for Evidence and reflects how much the point-of-sale market has changed since.
The consultation runs for eight weeks, from 23 June to 18 August 2026, and is of particular interest to sole traders, small and medium-sized businesses in retail and hospitality, and their trade bodies. Responses can be sent to ESSpolicy@hmrc.gov.uk.
The Penalties for Electronic Sales Suppression Are Already Severe
This is not a distant threat. HMRC has held tough anti-ESS powers since the Finance Act 2022. Making, supplying or modifying an ESS tool can attract a penalty of up to £50,000 per tool. Simply possessing one triggers an initial £1,000 penalty, followed by daily penalties of up to £75 — capped at a further £50,000 — for as long as the tool is held. On top of that, businesses that have suppressed sales face assessment for the underpaid tax, interest, and separate inaccuracy penalties. New software standards would sit alongside this regime, not replace it.
What Retail and Hospitality Businesses Should Do Now
The practical message is simple: make sure your till and record-keeping are demonstrably clean. Review how your EPOS/MPOS system stores and reports sales, keep complete records that reconcile to your bank and card settlements, and — if there is any historic irregularity — consider a voluntary disclosure before HMRC comes knocking. Businesses and trade bodies with a view on the proposals also have a genuine opportunity to shape the outcome before 18 August.
Why This Matters Even If You Have Nothing to Hide
Honest retailers and hospitality operators have the most to gain from tighter standards. Electronic Sales Suppression distorts competition, letting non-compliant rivals undercut on price while starving public services of revenue. Mandatory, tamper-resistant till software would level the field — but it will also raise the baseline expectation for everyone’s record-keeping. Businesses that already keep clean, reconcilable digital records will adapt easily; those relying on ageing or loosely controlled systems should treat this consultation as an early warning to modernise now, rather than scrambling when standards become compulsory.
How Our Guildford-Based Team Can Help
As accountants in Surrey serving clients across the UK, our Guildford-based team helps retail and hospitality businesses keep their VAT and bookkeeping watertight and audit-ready. Whether you want a health-check of your till records, support with a voluntary disclosure, or help responding to the consultation, our VAT and tax advisory and planning specialists can guide you. The full consultation is published on gov.uk.
Concerned about how these changes affect your business? Talk to us today. Call 01483 230 777, email info@taxdigit.co.uk, or reach us via our contact page for bespoke, plain-English advice.