Consultation outcome

Electronic Sales Suppression — Summary of responses

Updated 28 October 2026

1. Executive Summary

Electronic sales suppression (ESS) is a form of till fraud, which occurs when businesses alter digital sales records to under report transactions and reduce tax liabilities. Businesses may use illegal software or misuse system features to hide sales, resulting in lost public revenue and unfair advantages for non-compliant businesses. On 23 June 2026, the Government published a consultation on introducing mandatory software standards for Electronic Point of Sale (EPOS) and Mobile Point of Sale (MPOS) systems. This document sets out the results of that consultation.

The consultation received 17 written responses from software, payment, fiscalisation, security and retail technology providers, trade bodies and individuals. Contributions were made by an additional 4 stakeholders through roundtable discussions. The Government wishes to thank all those who took the time to respond to the consultation. The views, evidence and insights provided by respondents have been invaluable in improving the Government’s understanding of the opportunities, challenges and practical considerations associated with software standards.

Respondents broadly supported action to tackle ESS and the principle of introducing software standards to improve the integrity of electronic sales records. Support was generally conditional on the requirements being proportionate, practical and capable of accommodating different technologies and legitimate business processes.  However, none of the comments challenged the case for introducing software standards.

There was broad agreement that sales records should be protected so that subsequent alteration or deletion could be detected, and that systems should produce data in a standardised format. Respondents generally favoured outcome-based and technology-neutral requirements, clear technical specifications, sufficient implementation time and allowing existing systems to be upgraded where practicable. They also emphasised the importance of involving industry in developing the detailed standards.

The main concerns related to cost, proportionality and implementation, particularly the potential effect of fixed compliance and certification costs on smaller providers and businesses. Views differed on the detailed technical model, when transaction protection should begin, certification and registration arrangements, the allocation of responsibilities between providers and businesses, and requirements relating to receipts. Respondents proposed a range of approaches to these issues.

Headline Government conclusions

Given the broad support for introducing software standards, the Government announced in Budget 2026 that it will introduce mandatory software standards for EPOS and MPOS devices. The Government will work with software providers, businesses, representative bodies and technical specialists to consider the issues raised in this consultation and develop detailed implementation proposals.  This further engagement will inform the publication of a technical consultation in summer 2027, setting out a detailed plan to deliver a proportionate solution that minimises the burdens on business while meeting the aim of tackling ESS.

2. Introduction

Electronic sales suppression is a form of till fraud which occurs when a business manipulates digital sales records to hide transactions or reduce their apparent value. This allows the business to understate its turnover and tax liabilities while retaining records that may appear legitimate. ESS reduces revenue available for public services and gives non-compliant businesses an unfair advantage over those that meet their tax obligations.

The Government has already taken action to tackle ESS. Finance Act 2022 strengthened HMRC’s powers to address the possession, manufacture, supply and promotion of ESS tools. However, these powers principally address ESS once unlawful tools or behaviour have been identified. Software standards could complement them by improving the integrity of electronic sales records and reducing opportunities for transactions to be altered or removed without detection.

On 23 June 2026, the Government published a consultation on introducing mandatory software standards for EPOS and MPOS systems. The consultation sought views on how the market and the ESS threat had developed, the potential benefits and impacts of software standards, and how any requirements could be designed and implemented. It covered data formats, transaction protection, certification and registration, responsibilities on providers and businesses, receipts, compliance checks and implementation.

The consultation was open for eight weeks and closed on 18 August 2026. It invited responses from businesses using point-of-sale systems, software and hardware developers, providers and resellers, trade and representative bodies, tax professionals, and others with knowledge or experience of ESS. Respondents could answer the questions most relevant to them rather than the consultation in full. HMRC also undertook stakeholder engagement during the consultation period.

This document summarises the responses received, sets out the Government’s response to the main issues raised and explains the next steps in developing the policy.

3. About responses

The consultation attracted responses from 21 respondents, both in the form of written contributions and roundtable discussions. Responses were submitted by a broad range of stakeholders, with the largest group being software providers. Most submissions were substantive, with 11 of the 17 written responses classified as long or very long, providing detailed evidence and commentary on the proposals.

The overall sentiment has been broadly positive. Of the 21 responses analysed, 18 supported the introduction of software standards, including 5 that were strongly supportive and 13 that were supportive with caveats. 1 response was mixed, 1 expressed concern and 1 was opposed. While respondents generally recognised the need to tackle ESS and improve the integrity of sales records, support was often conditional on the standards being proportionate, practical and aligned with existing business and software practices.

Most respondents structured their submissions around the consultation questions, although several answered only those questions relevant to their experience and a number provided broader thematic responses. Many of the issues raised were closely connected and appeared across several answers. This document therefore groups the responses into chapters covering related sets of questions, rather than summarising each question separately. Each chapter identifies the questions it covers, ensuring that the substance of the responses is addressed while reducing repetition and presenting the main areas of agreement and differing views more clearly.

Overall sentiment of consultation responses

	Number of responses
Strongly supportive	5
Supportive with caveats	13
Mixed	1
Concern	1
Opposed	1

4. Summary of responses by theme

4.1 Understanding ESS and market developments

Questions 1 to 7

The majority of respondents recognised that EPOS and MPOS records could be altered, deleted or excluded from the recorded audit trail. However, their direct experience varied.

Views on whether the ESS threat has increased since 2018 were mixed. Some respondents considered that the growth of low-cost, cloud-based and integrated EPOS/MPOS systems has created new opportunities for determined evaders, with one noting that offshore cloud-hosted solutions could reduce detection. While respondents provided limited evidence on changes in the overall prevalence of ESS, a number flagged that they were aware of ESS distorting competition in their sector. For example, a trade body stated they knew of tax-compliant businesses in their sector that were facing financial difficulty, which they suggested was a result of ESS use by their competitors. Several respondents highlighted that other jurisdictions have increasingly adopted preventative controls to address evolving risks.

Respondents provided little direct evidence on how ESS tools were marketed, promoted or sold. Several said they had no direct experience or market intelligence on this activity. The responses did not therefore provide a clear picture of the channels through which ESS functionality was being supplied.

Respondents who identified an impact on MPOS growth stated that this had increased competition, reduced costs and widened access to digital payments, while also creating new technical complexity for providers. Several reported little or no direct impact on their business. Respondents expected the use of MPOS and cloud-based systems to continue increasing, alongside closer links between point-of-sale systems, payment systems and other business functions.

Evidence on the effect of the Finance Act 2022 provisions was limited. Several respondents viewed legislative measures and software standards as complementary components of an effective anti-ESS framework, noting that existing legislation provides a clear deterrent, with software standards seen as a preventative measure that reduces opportunities for ESS activity, improves its detection and disrupts determined tax evaders.

Government response and next steps

The Government notes the limited direct evidence provided on the prevalence, marketing and supply of ESS tools, and the mixed views on how the threat has changed since 2018. HMRC will continue to draw on operational evidence and stakeholder engagement to improve its understanding of the market. As policy proposals are developed, HMRC will engage with software providers, businesses and representative bodies to ensure that any approach reflects technological change.

4.2 Benefits and impacts of software standards

Questions 8 to 13

Respondents supported the objective of improving the integrity and reliability of sales records. They considered that software standards could make it more difficult to alter or delete recorded transactions, support more consistent compliance and help create a level playing field for compliant businesses and software providers. Some respondents also identified potential benefits for bookkeeping, reconciliation and confidence in business records.

Support was generally conditional on the requirements being clear, proportionate and technology neutral. Respondents cautioned that overly complex or prescriptive requirements could increase costs without delivering the desired benefits.

Respondents agreed that standards could improve competition by establishing consistent expectations and reducing unfair advantages to non-compliant providers. However, they also warned that fixed compliance costs and onerous certification requirements could disproportionately affect smaller suppliers, discourage market entry and limit customer choice. The overall effect on competition was therefore seen as dependent on the detailed design and implementation of the standards. HMRC should therefore ensure that any future approach protects technological innovation by allowing providers the flexibility to develop new solutions, adopt emerging technologies and respond to changing business needs.

The principal burdens identified for software providers included development, integration, testing, certification, or assurance processes. Many noted that older or unsupported legacy systems (basic cash registers) could face higher implementation costs and technical challenges in meeting new requirements.

Resellers could face costs from changing product lines, retraining staff and supporting customers. For businesses using EPOS or MPOS systems, particularly smaller businesses, potential impacts included software or hardware upgrades, staff training, disruption and higher purchase or subscription costs. Some respondents also highlighted the cumulative effect of other regulatory changes.

Respondents suggested that burdens could be alleviated through outlining clear technical requirements, practical guidance and testing tools, supported by realistic implementation timescales and a phased rollout.

Respondents with experience of overseas regimes identified useful features in the German and Austrian approaches, particularly the separation of security functions, independent assurance of security components and machine-readable verification. However, respondents also drew lessons from France, Spain, Norway and other jurisdictions, and did not favour adopting any single overseas regime wholesale. They generally supported learning from international experience and aligning with established approaches where appropriate, particularly where this would allow providers operating across several countries to reuse existing systems and compliance work. However, respondents did not identify a single overseas model that should be adopted without adaptation for the UK, and some highlighted costs, complexity or operational difficulties arising from particular regimes. Respondents therefore supported international alignment where practicable, while recognising that overseas approaches may need to be adapted to reflect the structure and needs of the UK market.

Government response and next steps

The Government welcomes respondents’ support for improving the integrity of digital sales and recognises that the benefits of standards will depend on their proportionality and practical design. As policy proposals are developed, HMRC will continue to engage with software providers, businesses, and representative bodies to understand the distribution of costs and impacts across the market and how these could be minimised. HMRC will seek to maximise the benefits for compliant businesses and the Exchequer while maintaining competition, supporting different technologies and avoiding unnecessary cost and disruption.

4.3 Standardised data formats and SAF-T

Questions 14 to 16

Respondents generally supported a standardised format for exchanging EPOS and MPOS data. They identified potential benefits from greater consistency, including easier validation and analysis of sales records and improved interoperability with accounting and other business systems.

Several respondents supported using an appropriately specified version of the Standard Audit File for Tax, known as SAF-T, as an export format. They generally favoured requiring systems to produce data in the standard format when needed, rather than prescribing how providers must store data internally. Respondents cautioned that requiring native SAF-T storage could involve substantial product redesign, increase costs and constrain providers’ existing system architecture.

Respondents generally considered that alignment with established international data standards could reduce duplication and implementation costs for providers operating across several jurisdictions. However, they noted that the UK would still need to define the information required, publish a clear specification and accommodate the characteristics of the UK EPOS and MPOS market. Respondents cautioned against unnecessary UK-specific variations where established standards could meet the same need.

Several respondents noted that SAF-T or a comparable format would not by itself deliver transaction integrity. They considered that the data format and the controls protecting the underlying transaction records should therefore be specified separately.

Respondents also emphasised that EPOS and MPOS systems perform operational functions that differ from those of accounting software. Any standard would need to accommodate legitimate processes such as refunds, voids, cancellations, discounts, split payments, offline transactions and corrections, and operate across locally installed, cloud-based and mobile systems. A few also identified possible wider benefits from standardised data, including integration with accounting and digital receipt systems.

Government response and next steps

The Government welcomes respondents’ support for greater consistency in the format and availability of sales data. As policy proposals are developed, HMRC will continue to engage with industry and other relevant stakeholders on the appropriate format, scope and governance of any data standard, including the potential use of SAF-T and alignment with relevant international standards. HMRC will seek to ensure that any approach accommodates legitimate business processes and minimises unnecessary cost, duplication and disruption.

4.4 Transaction protection and fiscalisation controls

Questions 17 to 21

Respondents supported the principle of protecting sales records so that subsequent alteration or deletion could be detected. They considered that tamper-evident records could improve confidence in the completeness and reliability of sales data and assist businesses and HMRC in verifying that recorded transactions had not subsequently been changed.

Some respondents distinguished encryption, which protects confidentiality, from controls intended to demonstrate record integrity. Respondents referred to hashing, digital signatures and transaction chaining as possible means of making changes detectable. A few also cautioned against describing transaction chaining as blockchain, as this could imply a more complex technical solution than was required.

Respondents generally favoured requirements that specify the level of assurance needed rather than mandate a particular technology. However, some said a common technical specification would still be required for independent and consistent verification. This could set clear rules for the information protected, the order of records, and how integrity values are calculated and validated.

Respondents emphasised that any controls would need to distinguish deliberate sales suppression from legitimate transaction events, including refunds, voids, cancellations and corrections. Views then differed on when a transaction should enter the protected record.

Most respondents preferred records to be protected when a transaction is created rather than when finalised. They considered this necessary to preserve evidence of amendments, cancellations, voids and abandoned transactions.  Some cautioned that the starting point would need to be defined carefully to exclude activity that did not amount to an initiated transaction.

A minority preferred protection to apply only when financial transactions were completed, allowing legitimate amendments, split payments, transfers and abandoned transactions. Some suggested protecting completed sales while capturing voids, refunds, cancellations and other relevant events in a separate tamper-evident audit trail. Others had no firm preference and called for further technical consideration.

Several respondents also highlighted the need for any controls to accommodate different system architectures and operating conditions. Cloud-based systems may hold their authoritative records centrally rather than on an individual device, while other systems need to operate during periods without internet connectivity. Multi-terminal systems can also allow a transaction to begin on one terminal and be completed on another. Respondents therefore cautioned against requiring protection to occur only on a particular physical device or through a single real-time process.

A few respondents noted that modern systems could implement cryptographic controls using established technologies, while legacy systems might require significant redevelopment or replacement. Many also identified the need to consider exceptional circumstances such as system failures, data corruption and breaks in the transaction chain. They said that failures should be detectable and that clear arrangements would be needed for managing records whose integrity could not be verified.

Some respondents also noted a limitation of transaction protection: it can provide assurance about records entered into a system but cannot by itself identify a sale that was never recorded. They therefore emphasised that technical controls should preserve evidence of relevant transaction events and support verification, rather than being treated as a complete solution to sales suppression.

Government response and next steps

The Government welcomes respondents’ support for protecting sales records against undetectable alteration or deletion. As policy proposals are developed, HMRC will continue to engage with industry and technical specialists on when protection should begin, how legitimate transaction events should be recorded and how controls could operate across different system architectures.

4.5 Certification, registration and provider responsibilities

Questions 22 to 24

Respondents generally supported the principle that an assurance process would be needed to demonstrate compliance with the proposed standards. Among respondents expressing a clear preference, many preferred self-certification or supplier declaration as the better approach.  Respondents noted that software is updated regularly and argued that requiring independent approval for each product, version or update could create significant costs and delays, particularly for smaller providers. They considered that self-certification could provide a more proportionate approach if supported by clear requirements, evidence retention, HMRC oversight and sanctions for false declarations. Some also suggested recognising existing assurance schemes to avoid duplication and reduce compliance burdens.

Others, however, supported independent assessment or Government approval, suggesting that manufacturer self-certification would not provide sufficient assurance. These respondents differed on whether independent assurance should apply to the complete product or a subset of it — for example, assuring a defined security component combined with a manufacturer’s declaration of the wider system’s conformity. Respondents also differed on whether certification should apply to an individual product or version, a product family or platform, a security component or the wider fiscal solution.

Respondents also were in agreement that a register of those certified systems would help businesses and HMRC easily identify compliant systems, placing responsibility for product registration on the manufacturer, provider or UK distributor.

Views were less settled on whether there should also be a register of all system installations, which could help HMRC identify businesses using or not using compliant systems. One respondent suggested that installers should normally register individual deployments, while another proposed that suppliers register the sale. Another considered that businesses should maintain accurate details of the listed product they used. Business representatives cautioned that requiring businesses to register every terminal or system could create disproportionate administration, particularly for SMEs and multi-site operators. It was also highlighted that businesses could register a system, but not use it.

Respondents who addressed penalties were generally supportive, stating these could promote compliance if they were clear and proportionate. They generally supported distinguishing deliberate or negligent non-compliance from vulnerabilities identified and corrected in good faith. Some proposed defined arrangements for disclosure and remediation before penalties were applied.  They added that responsibilities should reflect what each party controlled.  For example, a provider should not be automatically liable for businesses that don’t update their systems or make unauthorised changes.

Government response and next steps

The Government notes respondents’ support for a transparent assurance framework and their differing views on certification, registration and responsibility. HMRC will consider these views, including the potential costs and benefits of self-certification, independent assurance and hybrid approaches, and the respective roles of providers, intermediaries and businesses. HMRC will also keep proportionality, software-update cycles, barriers to entry and the treatment of good-faith disclosure and remediation in mind as the policy is developed.

4.6 Receipts

Questions 25 to 26

Respondents generally recognised that standardised information on receipts or reports could help link a receipt to the corresponding protected transaction and support quicker verification. Some supported machine-readable information, such as transaction references or QR codes, provided it was limited to what was needed for the check. Respondents cautioned that successfully verifying a receipt would not, by itself, demonstrate that every sale had been recorded.

Many respondents opposed requiring a receipt to be issued automatically to every customer for every transaction. They highlighted the cost of paper, printing and equipment, environmental waste and the potential effect on speed of service, particularly for high-volume businesses processing small transactions. Respondents also noted that customers may not want a receipt and that digital delivery could introduce delay, privacy concerns or a need to collect contact details.

Several respondents distinguished between creating and securely retaining a receipt or transaction record, making a receipt available, and requiring a copy to be issued to the customer. Many favoured allowing businesses to provide paper or digital receipts and requiring a receipt to be offered or made available on request, rather than issued automatically. A smaller number supported generating a receipt for every completed transaction, although some of these respondents did not consider that every customer should receive a paper copy.

Several respondents opposed a £35 threshold. This was because, they said, ESS is more of a risk in high-volume, low-value transactions in high-risk sectors. Others saw a threshold as a possible way to reduce customer-facing burdens. However, respondents generally distinguished any receipt threshold from the underlying requirement to create and retain a complete record, which they considered should apply regardless of transaction value.

Government response and next steps

The Government notes the support for complete and verifiable transaction records and the concerns raised about mandatory customer-facing receipt issuance, particularly for low-value transactions. HMRC will consider the distinctions respondents made between creating a record, offering or making a receipt available and issuing a receipt automatically. The potential costs, environmental impacts, privacy implications, role of thresholds, and scope of any electronic recording requirement will be considered as the consultation progresses.

4.7 Requiring businesses to use EPOS/MPOS systems

Question 27

The consultation asked whether businesses in appropriate sectors or circumstances should be required to use an EPOS/MPOS system and record all relevant sales. Respondents who addressed this proposal generally recognised that transaction-integrity controls cannot protect sales that are not entered into the system. Several considered that mandatory use of a compliant system could be justified in sectors or circumstances where HMRC could demonstrate a material ESS risk, including risks associated with unrecorded cash sales. However, they emphasised that any requirement should be clear, evidence-based and proportionate, with affordable systems, appropriate exceptions and arrangements for outages or equipment failure. One representative body cautioned against applying the requirement across whole sectors, noting the difference between requiring an existing EPOS user to adopt a compliant system and requiring a business that currently uses manual records to purchase one. Conversely, some respondents noted that applying the requirement only to existing EPOS users could leave businesses using manual recording methods outside the regime.

Government response and next steps

The Government notes the views of respondents and will take these into consideration when developing the proposal.

4.8 Compliance checks

Question 28

Respondents who addressed light-touch checks were generally supportive. They considered that standardised outputs could help HMRC verify technical compliance more quickly, identify errors and focus detailed enquiries where concerns arose. They favoured clear and proportionate checks that minimised disruption. Some noted that checking the integrity of records held by a system would not establish that all sales had been entered into it.

Government response and next steps

The Government will work with industry to consider how light-touch compliance checks could be incorporated in the design of the software standards.

4.9 Implementation

Questions 29 to 32

Respondents consistently emphasised the importance of clear requirements, sufficient notice and engagement with affected businesses and providers. They generally favoured a phased approach supported by a clear timetable, allowing providers to develop and test changes and businesses to plan for upgrades or replacement. Respondents cautioned against setting a final compliance date before the technical requirements and supporting materials were sufficiently complete and stable.

Several respondents called for detailed technical specifications, examples, test cases and validation tools to be available sufficiently in advance. They also supported clear version control and transitional arrangements when requirements changed. Some proposed a standing technical group involving providers, business representatives and technical specialists to inform the maintenance of specifications and test materials.

Respondents generally favoured requirements that could accommodate locally installed, cloud-based, mobile and hybrid systems. Several supported allowing existing systems to become compliant through software updates where practicable and providing proportionate transitional treatment for older or unsupported products. Business representatives emphasised the need to understand costs and avoid unnecessary replacement of functioning equipment.

Some respondents favoured staged or risk-based introduction, beginning where HMRC had the clearest evidence of ESS risk. They considered that this could provide evidence on costs and practical operation before requirements were applied more widely. One representative body cautioned against treating an entire sector as uniformly high risk and recommended reflecting differences in business size, model, payment methods and technology.

Several respondents emphasised clear communication before implementation or enforcement. Some also asked HMRC to take account of related regulatory changes and existing assurance requirements to reduce duplication. A few proposed monitoring costs, market effects and the effectiveness of any measures following implementation.

Government response and next steps

The Government recognises the importance respondents placed on clarity, proportionality, sufficient notice and workable transitional arrangements. HMRC will consider these issues, including the readiness of technical specifications and validation materials, the treatment of existing systems, impacts on smaller businesses and providers, possible phasing and interactions with other requirements. These considerations will be kept in mind as the policy and any implementation approach are developed.

5. Next steps

The Government announced at Budget 2026 that it will introduce software standards for EPOS and MPOS systems to improve the integrity of electronic sales records and reduce opportunities for ESS.

Further technical work is required before decisions can be taken on the detailed design. HMRC will work with software providers, businesses, representative bodies and technical specialists to consider the issues raised through the consultation. This will include the scope and technical requirements of the standards, data formats, transaction protection, assurance and registration arrangements, the allocation of responsibilities, compliance requirements and the treatment of existing systems. HMRC will take account of costs, proportionality, different system architectures and the need for sufficient implementation and transitional arrangements.

HMRC intends to publish a further technical consultation in summer 2027, setting out detailed proposals for implementation. Responses to that consultation will inform the final policy design and subsequent legislation.

Annex A: List of respondents

Block Inc

Cash Register Group (CRG)

Electronic Money Association

Federation of Independent Retailers

Fiscal Solutions Doo Novi Sad

Fiskaly GmbH

Haven Systems

ICR Touch Ltd

National Federation of Fish Friers

Ontabee Solutions Pvt Ltd

Panda EPOS Ltd

Point One

ReceiptHero Oy

Stripe Ltd

Swissbit AG

Tabology Ltd

UKHospitality

VME Coop

Zonal Retail Data Systems Ltd

Written responses were also received from two individuals.