TaxDigit

Category: VAT

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.

New Till-Software Standards — HMRC electronic sales suppression EPOS/MPOS consultation closing 18 August 2026, explained by TaxDigit accountants in Surrey

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.

For many smaller businesses, special VAT schemes can simplify accounting and improve cash flow. HMRC offers several optional schemes designed to reduce the administrative burden of VAT, and choosing the right one can make a real difference.

Special VAT schemes including Flat Rate and Cash Accounting advice from TaxDigit

The Flat Rate Scheme

The Flat Rate Scheme lets eligible businesses pay VAT as a fixed percentage of their turnover, rather than calculating VAT on every sale and purchase. It simplifies record-keeping, though whether it saves money depends on the business’s costs and sector.

Cash and Annual Accounting

Among the other VAT schemes, the Cash Accounting Scheme lets you account for VAT when you are paid rather than when you invoice, helping cash flow. The Annual Accounting Scheme reduces returns to one a year with interim payments.

Choosing the Right Scheme

Each of these VAT schemes has eligibility limits and pros and cons. The best choice depends on your turnover, customers and cost profile, so it pays to review the options carefully.

How TaxDigit Can Help

Our Guildford-based team helps businesses choose and manage the right VAT schemes. Get in touch to simplify your VAT and protect cash flow.

Special VAT Schemes: UK-Wide Support

Special VAT schemes can simplify accounting for smaller businesses right across the United Kingdom, not just near our Guildford head office. TaxDigit helps businesses UK-wide choose and run the VAT scheme that best fits their size, sector and cash flow.

Our chartered certified accountants compare the Flat Rate, Cash Accounting and Annual Accounting schemes against your figures so you adopt the one that genuinely saves time and money. We support clients UK-wide, both remotely and from our Guildford office.

Choosing a special VAT scheme is not a one-off decision. As turnover grows, margins change or you start importing and exporting, a scheme that once helped can begin to cost you. We review your eligibility and the numbers regularly, and we handle the joining or leaving process with HMRC so the transition is smooth and fully compliant.

How we help with special VAT schemes

  • Assessing eligibility for the Flat Rate, Cash Accounting and Annual Accounting schemes
  • Modelling which scheme improves your cash flow or reduces admin
  • Handling registration, joining and leaving a scheme with HMRC
  • Checking the limited cost trader rules under the Flat Rate Scheme
  • Reviewing your scheme each year as your business changes

HMRC explains one of the most common options here: HMRC guidance on the VAT Flat Rate Scheme.

Frequently Asked Questions

What are special VAT schemes?
They are optional HMRC schemes, such as the Flat Rate, Cash Accounting and Annual Accounting schemes, designed to simplify VAT or improve cash flow for eligible smaller businesses.

Which VAT scheme is best for my business?
It depends on your turnover, margins and how much VAT you reclaim, so it is worth modelling each option before you commit.

Can TaxDigit help if I am not based in Guildford?
Yes. We advise on special VAT schemes for clients UK-wide, remotely and from our Guildford office.

The VAT treatment of exports and imports of goods and services can be complex, particularly since the UK left the EU. Getting it right is essential for businesses trading internationally, both to stay compliant and to avoid unnecessary costs.

VAT on exports and imports of goods and services advice from TaxDigit accountants

Exporting Goods

Exports of goods from the UK are generally zero-rated for VAT, provided you hold the right evidence of export. This means you do not charge VAT but can still recover input VAT, so keeping proper documentation is essential to support zero-rating.

Importing Goods

On imports, VAT is normally due at the border, though postponed VAT accounting allows many businesses to account for import VAT on their VAT return instead of paying it upfront, easing cash flow.

Services Across Borders

For exports and imports of services, the place of supply rules determine where VAT is due. These rules can be intricate, and the reverse charge often applies to cross-border services.

How TaxDigit Can Help

Our Guildford-based team helps businesses handle the VAT on exports and imports correctly. Contact us to keep your international trade compliant.

Exports and Imports: UK-Wide VAT Support

The VAT treatment of exports and imports of goods and services affects businesses trading right across the United Kingdom, not just near our Guildford head office. TaxDigit helps UK businesses get cross-border VAT right, especially since the UK left the EU.

Our chartered certified accountants advise on zero-rating exports, import VAT, postponed VAT accounting and the place-of-supply rules for services. We support clients UK-wide, both remotely and from our Guildford office.

International trade adds several moving parts to your VAT return that domestic-only businesses never see. Evidence of export, EORI numbers, customs declarations and the correct place-of-supply treatment for services all need to line up. We help you build a reliable process so each import and export is recorded correctly the first time, reducing the risk of penalties or blocked input VAT.

How we help with exports and imports

  • Confirming when exports of goods can be zero-rated and what evidence is needed
  • Applying postponed VAT accounting on imports to protect cash flow
  • Determining the place of supply for cross-border services
  • Reviewing customs and EORI requirements alongside VAT
  • Completing VAT returns correctly for international trade

HMRC’s step-by-step guide to importing is here: HMRC guide to importing goods into the UK.

Frequently Asked Questions

Do I charge VAT on exports?
Exports of goods can often be zero-rated for VAT if you hold valid evidence of export, but the rules for services depend on the place-of-supply position.

How is import VAT handled?
Many businesses use postponed VAT accounting, which lets you account for import VAT on your VAT return rather than paying it at the border.

Can TaxDigit help if I am not based in Guildford?
Yes. We advise on VAT for exports and imports for clients UK-wide, remotely and from our Guildford office.