New proposals to tackle Electronic Sales Suppression

In recent years, Electronic Sales Suppression (ESS) has been the subject of government reports, consultations and new legislation, yet it remains a cause for concern.

• ESS involves manipulating digital sales records to reduce income and evade tax.

HMRC have identified that certain individuals and businesses in Electronic Point of Sale (EPOS)/Mobile Point of Sale (MPOS) supply chains are developing or modifying POS systems to suppress sales to facilitate tax evasion.

• EPOS/MPOS systems are particularly used by retail businesses to record sales and deal with other business transactions. 
• HMRC believe that ESS is more prevalent in small retail, takeaway and hospitality businesses.

The government is proposing to introduce software standards for the EPOS and MPOS sector.

• These standards will consist of a set of uniform rules, protocols and compliance requirements that ensure every system records sales and financial data accurately, securely and in a way that cannot be easily manipulated or tampered with.
• No implementation timeline is provided.

The proposed measures include:

• Requiring an unalterable and complete transaction log that contains details of every individual transaction and adjustment, indelibly linked together in an encrypted chain.
  • The proposal is for all EPOS/MPOS systems to use the Standard Audit File for Tax (SAF-T) format to store sales records. This format would enable tax audits to be conducted more efficiently.
  • Only VAT-registered businesses are currently required to keep records of every transaction. The proposals extend this requirement to all businesses.
• Establishing a register of EPOS/MPOS systems sold, transferred, or used in the UK. A certification system would show whether the software complies with the new standards.
  • Uncertified systems and those that do not meet the required standards would not be allowed sold in the UK.
• Requiring mandatory information recording by the EPOS/MPOS system, for specific information to be included on receipts, reports produced by the device and mandatory receipting.
  • One proposal in the consultation is to require QR codes on till reports that can be scanned to verify the integrity of records.
• Mandating businesses in the small retail, takeaway and hospitality sectors to use compliant EPOS/MPOS systems to record all sales.
• New compliance checks and tools aimed at the retail sector.
  • The till report QR codes mentioned above could allow an HMRC officer to make an unannounced visit to check the integrity of the system, verify summary values on the report, and, if complete and correct, close the check and leave within 30 minutes.
• Requiring EPOS/MPOS system suppliers to protect the integrity of their systems to prevent ESS.
  • Penalties could be introduced to enforce this.
• Further strengthening ESS-related legislation.

The consultation closes on 18 August 2026. Responses can be made by email to This email address is being protected from spambots. You need JavaScript enabled to view it. or by post.

Useful guides on this topic

Penalties: Electronic Sales Suppression
What penalties apply for till tampering or Electronic Sales Suppression (ESS)?

Record-keeping & tax: What, how and until when?
How long do you need to keep your books and records for tax. Record-keeping for Income Tax (IT), PAYE, Capital Gains Tax (CGT), VAT and Corporation Tax (CT). What if you lose your records?

Corporate Criminal Offence: failure to prevent tax evasion toolkit
This is an interactive tool to determine 'At a glance' whether there has been an offence committed under the Criminal Finances Act (2017) in respect of a corporate failure to prevent the criminal facilitation of tax evasion.

External link

Electronic Sales Suppression - Introduction of software standards in EPOS/MPOS systems

Question 1: Are you aware that EPOS/MPOS systems can be modified to alter the audit trail? In your experience, how?

Question 2: How has the threat posed by ESS changed since 2018, either in the UK or internationally?

Question 3: Please provide your views on how ESS technology is marketed, promoted and sold?

Question 4: What effect has the recent proliferation of MPOS systems had on your business?

Question 5: Do you agree that the advances in technology seen in the EPOS/MPOS sector have made it easier to carry out ESS? If so, how?

Question 6: What trends or innovations within the EPOS/MPOS sector do you think will have the largest impact over the next five years?

Question 7: Have you seen any impact following the introduction of the new legislation, either in society in general, or specifically to your business? If so, what has that been?

Question 8: Do you agree with these benefits? Are there any other benefits that you feel would be created by the introduction of software standards?

Question 9: What do you feel would be the impact on competitiveness in the sector following the introduction of software standards?

Question 10: What burdens could this place on business?

Question 11: What are the most/least concerning burdens for you or your business?

Question 12: How could any additional costs or business burdens be minimised?

Question 13: Do you have knowledge or experience of working with standards in other jurisdictions, such as, but not limited to, Austria, Germany, or Norway?

Question 14: Would having a standardised format benefit businesses in the UK?

Question 15: Would requiring a data standard for EPOS/MPOS systems, aligned with other countries, reduce complexity for manufacturers?

Question 16: What are the wider issues related to the introduction of the SAF-T standard for EPOS/MPOS systems?

Question 17: What do you see as the key benefits of having an indelible encrypted record of sales contained on EPOS/MPOS devices?

Question 18: What are the barriers to introducing encryption or other security features either on existing or new EPOS/MPOS systems?

Question 19: What are the key benefits and risks to businesses of an EPOS/MPOS system which connects each individual transaction to the previous and the next?

Question 20: At which point do you think the transaction log should be protected, at creation (so all voids, cancelled sales or voided sales are included), or completion (so only finalised transactions are included)?

Question 21: What barriers would you face to the introduction of a form of encrypted transaction chaining, based on a form of closed-loop blockchain?

Question 22: Are there any reasons why a register of certified systems may not be feasible in the UK?

Question 23: Who do you feel should be responsible for registering an EPOS system?

Question 24: Who do you think is best placed to determine and issue such certification? What are your views on a system of manufacturer self-certification?

Question 25: What are the potential benefits and risks and challenges of introducing mandatory data on receipts or other reports to enable checks on the validity of transaction records?

Question 26: What are your views on mandating the issuance of receipts for all transactions, and how would this change if a minimum limit was applied, for example, only requiring receipts for transactions above £35?

Question 27: What are your thoughts on mandating that appropriate businesses record all sales using an EPOS/ECR system?

Question 28: What are your views on HMRC conducting light-touch compliance checks? These checks would be to check the integrity of EPOS/MPOS records and help businesses to identify areas of concern.

Question 29: What do you think of placing an obligation on EPOS/MPOS manufacturers/suppliers to protect the integrity of their systems?

Question 30: Do you think that an associated penalty for failing to protect the integrity of the system would encourage early voluntary compliance?

Question 31: Are there any specific factors that would facilitate or hinder the introduction and use of software standards in the UK?

Question 32: What do you feel would be essential in the approach the government takes when introducing software standards that would reduce the impact on EPOS users, developers, and manufacturers?