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This is a freeview 'At a glance' guide to Electronic Sales Suppression (ESS) penalties.

Finance Act 2022 includes legislation covering HMRC's new powers to tackle electronic sales suppression. It follows their Earlier consultation. The rules take effect from 24 February 2022.

Electronic Sales Suppression (ESS) is the practice of deliberately manipulating electronic sales records to hide the value of individual transactions. This practice artificially reduces the recorded turnover of the business evading tax while producing a credible audit trail.

The measures are aimed at developers, promoters, suppliers and users of ESS tools and makes them liable for penalties.

An ESS tool is a physical device, software, computer code or other digital data, as well as any other thing which:

Penalties of up to £50,000 (as an HMRC officer considers appropriate) can be charged to:

Penalties of up to £1,000 can be charged if:

Further daily penalties of up to £75 per day (up to a total of £50,000) can be charged where possession or access to the tool continues.

Useful guides on this topic

How to appeal a tax penalty
What are the steps in making an appeal? What should your appeal cover? What does recent case law say on this topic?

External Links

Policy paper: Powers to tackle electronic sales suppression

Finance Act 2022 Schedule 14


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