Guidance

Electronic sales suppression: possession of tools — CC/FS68A

Published 25 August 2026

This factsheet tells you about electronic sales suppression (ESS). It explains the powers we can use to help us identify and tackle ESS. It also explains the penalties we may charge if you’re in possession of an ESS tool.

This factsheet is one of a series. For the full list, go to GOV.UK and search ‘HMRC Compliance checks factsheets’.

What is ESS

ESS is where a business uses a tool to either hide or reduce the value of individual transactions on its electronic sales records. We call this sales suppression. They do this either at or after the point of sale. Their records then appear to be correct and complete.

Businesses do this to reduce their turnover so they pay less tax. They also do this to try to appear compliant.

What is an ESS tool

An ESS tool is a piece of software, computer code script or hardware. It allows a business to hide or reduce the value of individual transactions on its electronic sales records. This includes using and/or configuring a till, or point of sale (POS) system, in a way that suppresses sales.

We may charge you a penalty for being in possession of an ESS tool, even if you didn’t use it.

Our information powers

The law gives HMRC ‘information powers’ that allow us to ask for certain information and/or documents. We use these powers to check a person’s tax position. To do this, we issue an ‘information notice’. This is a document that legally requires a person to give us certain information and/or documents.

Schedule 14 to the Finance Act 2022 allows us to issue an information notice for ESS. This means we can ask for certain information that only applies to ESS. It allows us to issue a notice to a ‘relevant person’ for a ‘relevant purpose’.

Who is a ‘relevant person’

A ‘relevant person’ is any person who we think may be liable to a penalty for being involved in ESS. We explain these penalties below.

What is a ‘relevant purpose’

A ‘relevant purpose’ is the reason we’re asking for information about ESS and ESS tools. The law allows us to do this in 3 types of situations. These are to help us:

• decide whether a relevant person has made, supplied, promoted, or possesses an ESS tool — we would be able to charge this person a penalty
• understand how an ESS tool works
• identify any other person who has made, supplied, promoted, or possesses the ESS tool

If we give you an information notice, you must give us the information and any documents we ask for.
If you don’t, we can charge you penalties.

You can find out more about these penalties and information notices in our factsheet:

• CC/FS2, ‘Information notices’
• CC/FS23, ‘Third party information notices’

To find these factsheets, go to GOV.UK and search CC/FS2, CC/FS23 or CC/FS60.

Penalty for being in possession of an ESS tool

Being ‘in possession’ of an ESS tool includes:

• owning an ESS tool
• having access to an ESS tool
• trying to access an ESS tool

When we first suspect you’re in possession of an ESS tool, we’ll write to tell you to remove it or stop using it. We’ll also tell you that you need to ‘satisfy us’ you’ve removed the tool. This means you must give us all the information we ask you for to show you’re no longer in possession of the tool. If you don’t satisfy us you’ve removed the tool, we’ll charge you a fixed penalty.

If we’ve charged you an ESS penalty in the past 5 years, we’ll immediately charge you the fixed penalty. We won’t write to you before we charge it. We’ll also tell you to remove or stop using the tool.

After we charge you the fixed penalty, we’ll also charge you daily penalties. We’ll do this until you satisfy us you’re no longer in possession of the ESS tool.

If you have to pay more tax because of your involvement with ESS, we may charge you other penalties. This can include penalties for filing inaccurate documents or returns or failing to notify us that you must pay a specific tax.

You can find out more about penalties for not complying your tax obligations in our factsheet:

• CC/FS7a, ‘Penalties for inaccuracies in returns and documents’
• CC/FS11, ‘Penalties for failure to notify’

To find these factsheets, go to GOV.UK and search ‘CC/FS7a’ or ‘CC/FS11’.

When we won’t charge you a penalty

We won’t charge you a penalty from the time you satisfy us you’re no longer in possession of an ESS tool. Or, if you’ve been convicted of a criminal offence for your involvement in ESS.

How we work out the penalty

We can charge an initial fixed penalty of up to £1,000. When we’re considering the amount of penalty we’ll charge, we’ll take into account how much you’ve tried to comply with our request.

As well as a fixed penalty, we can charge daily penalties of up to £75 per day. The officer who writes to you will decide how much the daily rate will be each time they charge you the penalties.

If we’ve charged you an ESS penalty within the last 5 years, we’ll charge you the full £1,000 fixed penalty. After we’ve charged you the fixed £1,000 penalty, the daily penalty rate will normally be £75 per day.

Special circumstances

For most cases, when we charge an ESS penalty, we’ll follow the steps shown above. If we think there are any circumstances that need us to charge a lower penalty amount than we would usually charge, we’ll reduce the penalty. We call this a ‘special reduction’ and it can only apply in exceptional circumstances.

How we tell you about a penalty

We’ll write to tell you how much the penalty is and how we’ve worked it out. If there’s anything about the penalty that you don’t agree with, or if you have any information you think we haven’t already looked at, you should tell us straightaway.

Once we’ve looked at any information you’ve given us, we’ll send you a penalty assessment notice showing the amount we’re charging you.

If you disagree

If there’s something you don’t agree with, please tell us.

If we make a decision you can appeal against, we’ll write to you about the decision and tell you what to do if you disagree. You’ll usually have 3 ways to tell us if you disagree. Within 30 days, you can:

• send new information to the officer dealing with the check and ask them to look at it
• have your case reviewed by an HMRC officer who has not been involved in the matter
• arrange for an independent tribunal to hear your appeal and decide the matter

What you can do to avoid a penalty in future

You can avoid a penalty by:

• not installing an ESS tool to any device you own at any time
• not changing or configuring settings within your electronic point of sale (EPOS) system that creates or activates an ESS tool
• not accessing, or attempting to access, an ESS tool held on a device owned by someone else
• not using functions available on your EPOS system to reduce your sales unless there is a legitimate reason to do so

You should also keep full and accurate business records. This means you can show us what we need to see, if we ask for it and help us carry out any compliance checks more quickly.

More information

If you need help

If you have any health or personal circumstances that may make it difficult for you to deal with us, please tell the officer who has contacted you. We’ll help you in whatever way we can. For more information, go to GOV.UK and search ‘get help from HMRC if you need extra support’.

You can also ask someone else to deal with us on your behalf. For example, a professional adviser, friend or relative. However, we may still need to talk or write to you directly about some things. If we need to write to you, we’ll send a copy to the person you’ve asked us to deal with. If we need to talk to you, they can be with you when we do, if you prefer.

If you are not happy with our service

Tell the person or office you’ve been dealing with. They’ll try to put things right. If you are still not happy, they’ll tell you how to make a formal complaint.

Our privacy notice

Our privacy notice sets out the standards you can expect from us when we ask for information or hold information about you. For more information, go to GOV.UK and search ‘HMRC Privacy Notice’.