Five people have been arrested on suspicion of being behind a multi-million pound global fraud using software to hide till sales/
The arrests follow an extensive investigation leading to enforcement action in the UK, US and Australia. More than 100 HMRC officers visited 90 businesses across England, Scotland and Wales in a week of coordinated action.
The businesses are suspected of using an Electronic Sales Suppression tool to manipulate their takings to evade paying tax and HMRC has used data to identify thousands of potential users.
These businesses can now make a voluntary disclosure to correct their records and pay the right tax. HMRC will follow up with those who don’t come forward, which could lead to more severe penalties.
It is suspected the system was designed and sold by a group based in Staffordshire. Sales are put through the till as normal, but the system allows records to be manipulated by deleting sales and routing card payments through an offshore bank.
The group is also suspected of selling the system to businesses in the US and Australia.
The latest operation follows a HMRC investigation in May into a different ESS system. Three people were arrested and investigations are ongoing.
HMRC’s 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 a large-scale, technologically-enabled fraud.
“HMRC’s ground-breaking response, with internationally co-ordinated action, marks a significant moment in our efforts to close the net on those we suspect of designing, supplying and using electronic sales suppression software.
“Most businesses pay the tax that they owe. HMRC is on the side of this honest majority and our action helps to ensure they are not being under-cut by tax-evading competitors.
“This is just the beginning of our work in this area, and we already have other suspected suppliers in our sights. We are urging all users of these types of systems to come to us, before we come to them.”
