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With effect from 24 February 2022 onwards, HMRC has the power to charge penalties where a person engages in activities involving tools that can be used to suppress electronic sales of goods or services¹.

In Agent Update 96 (May 2022), HMRC stated that electronic sales suppression was a growing form of tax evasion, although it did not have enough information to estimate the scale of the problem. The electronic sales suppression penalty regime is also thought to be related to the electronic record keeping required under Making Tax Digital (MTD). Part of the business case for MTD is that it will reduce taxpayer errors and make it more difficult for taxpayers to commit fraud, and this penalty regime discourages anyone who may wish to design or use tools to suppress the recording of electronic sales which would lead to tax evasion.

For more on MTD, see A4.172.

For an update on HMRC's use of these powers in the first 12 and 24 months, see Agent Update 103 (Dec 2022), 'HMRC clamps down on major till fraud'