More than 20 takeaways and restaurants in Edinburgh, London, St Helens and Stoke have been raided as part of a crackdown on tax evasion using electronic till fraud
The action by HMRC officers took place over the last four weeks, with 24 hot food takeaways and restaurants targeted.
The visits coincided with the launch of criminal investigations by HMRC’s Fraud Investigation Service, which is conducting three interviews under caution this month with individuals from Stoke and St Helens.
When fraud till was first identified, HMRC said that 1,000s of businesses had used the fraudulent software scam. It allows businesses to under-report sales and evade tax by using electronic sales suppression (ESS) tools, which are software or devices that alter electronic point-of-sale records.
ESS tools are usually hardware or cloud-based software that allow businesses to understate their income in various ways.
Sales are put through the till as normal, but the system allows records to be manipulated – sometimes by deleting sales and linking to either domestic or offshore payment platforms.
To investigate ESS in the takeaway and restaurant sector, HMRC uses third party information, including bank account and transactional data from online food ordering platforms, to check against what has been declared.
Marc Gill, HMRC’s director of individuals & small business compliance, said: ‘ESS tools give businesses the appearance of trading legitimately, but in reality they are stealing tax that should be helping fund our vital public services.
‘We have sophisticated ways of detecting this type of fraud and anyone using, supplying, making or promoting ESS can face fines of up to £50,000 or criminal prosecution.
‘We urge those involved to come forward and use our disclosure facility on gov.uk rather than wait for us to contact you – it could lead to a reduction in financial penalties.”
Those involved are being urged to contact HMRC using a voluntary disclosure form before their wrongdoing is detected. The longer a business delays in disclosing information, the higher the financial penalties will be. Since May 2023 the department has received more than 50 voluntary disclosures from businesses about their undeclared sales.
An amnesty period for till fraudsters closed in April this year after a three-month campaign to root out businesses using the scam, co-ordinated by the operational alliance - the Joint Chiefs of Global Tax Enforcement (J5).
Last December five individuals were arrested as part of a global investigation to crack down on till fraud, which has been identified as a growing threat in the UK, US and Australia.
the time, HMRC director of fraud investigation Simon York said: ‘This was a highly sophisticated, truly global attack on the UK and our international partners. The group behind this activity is suspected of enabling thousands of businesses to evade tax in what is a large-scale, technologically enabled fraud.’
HMRC can commence a criminal investigation into tax fraud with the view to prosecution or, if appropriate, carry out a civil investigation under Code of Practice 9.
Anyone with information regarding ESS or any form of tax fraud should tell HMRC using the online whistleblower service.