HMRC launches consultation on mandatory POS software standards to address £450m till-fraud tax gap
HMRC launches consultation on mandatory POS software standards to address £450m till-fraud tax gap #
HM Revenue & Customs has opened a formal consultation on mandatory software standards for electronic point-of-sale and mobile point-of-sale systems, seeking to address a form of tax evasion known as electronic sales suppression, or till fraud.
Published on 23 June 2026 and running for eight weeks until 18 August, the consultation invites views from EPOS and MPOS developers, businesses that use point-of-sale systems, and organisations with an interest in tax compliance. According to the government’s consultation document, till fraud costs the Exchequer an estimated £450 million a year.
Electronic sales suppression involves using software or devices to alter digital transaction records after the fact, hiding or reducing the true value of sales and thereby cutting a business’s reported turnover and tax liability. HMRC says the practice is common in small retail businesses, takeaways, and hospitality venues, where cash transactions are widespread and till systems are in regular use.
The proposed regime includes several measures. A central requirement is an unalterable, encrypted transaction log: a complete record of every sale and adjustment linked in a cryptographic chain that cannot be silently edited. HMRC is also proposing that all EPOS and MPOS systems use the OECD’s Standard Audit File for Tax format, which would allow inspectors to conduct audits more efficiently. Currently, only VAT-registered businesses must retain records of every individual transaction; the proposals would extend that obligation to all businesses using a POS system.
The consultation also proposes a formal register of EPOS and MPOS systems sold, transferred, or operated in the UK, alongside a certification scheme to confirm that software meets the new standards. Systems that are uncertified or fall short of the requirements would be barred from sale in the UK. Receipts and system reports would be required to carry specific mandatory information, potentially including QR codes that would allow an HMRC officer to verify a system’s integrity during an unannounced visit and, if the system passes, conclude the check within 30 minutes.
The consultation also raises the prospect of penalties for suppliers who fail to protect their systems from being modified to suppress sales.
HMRC acknowledges that no mandatory standards for POS software currently exist in the UK, while noting that 16 of 37 OECD member countries have introduced comparable requirements, five of which also mandate real-time data transmission to the tax authority. No implementation timeline has been set, and the government says further technical consultation may follow depending on the responses received.
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