Autumn Budget 2018 – Electronic Sales Suppression (ESS)

HMRC consider that electronic point of sale (POS) systems can be subject to misuse. This can lead to transactions being reduced in value or hidden completely, leading to a corresponding reduction in tax liabilities from that business.

The Budget 2018 has announced that the government will publish a call for evidence in relation to ESS. This means that HMRC are looking to update their methods of monitoring and taxing profits of businesses to ensure they keep pace with the evolving technologies taxpayers utilise.

A call to evidence means HMRC will seek to engage with those who use POS systems and ask for details of interactions with the systems. This will likely come in the form of a set number of consultation questions. HMRC will then look to analyse the resulting information and compare this to its own understanding of POS systems at use in real businesses. HMRC will then be able to evaluate whether current compliance measures are the most effective way to deal with ESS in the future.

Potentially affected are those whose business uses electronic POS systems. Those who have interaction with POS systems in their business may wish to take part in the call for evidence when published, to ensure their views are properly represented in the information HMRC collects.