Do not overlook recent correspondence: A letter to businesses using Electronic Sales Suppression (ESS) in the UK

Recently, HMRC has been issuing notification letters to businesses suspected of abusing the ESS.

If you have also received a similar letter, please do not miss this article.

Why are you receiving this letter?

HMRC initiated this letter campaign primarily to encourage businesses misusing the ESS to honestly disclose the true situation.

HMRC states that some businesses are using ESS to conceal certain electronic sales records.

The ESS reduce the automatically recorded turnover, thereby reducing the amount of tax paid.

Due to different circumstances among companies, you need to conduct an internal investigation and respond to HMRC promptly.

HMRC letters

What to do next?

Firstly, when you receive this letter, do not ignore it with a sense of luck.

If you are our client, you can contact our accounting team for assistance immediately.

If you have your own accounting department, you need to understand your internal finances within 30 days and respond to HMRC.

If you are indeed using ESS, you need to voluntarily disclose it and check if you have correctly recorded all business turnover.

If you are not using  and have accurately declared your business turnover, you need to email HMRC to explain the situation.

In any case, when you receive this letter, you need to reply to HMRC and explain the true situation.

Ignoring or providing incorrect information

Any business that fails to respond to HMRC within the specified time will be subject to a formal investigation.

This mainly includes underreporting of turnover and taxes, with corresponding fines and interest being calculated.

If you reply to HMRC with false information, further investigation will be triggered once discovered.

fines and interest

Fines and interest

If you have not used ESS and have paid the correct amount of tax, there will usually be no fines or interest after HMRC’s investigation.

If you have used the ESS and admit to hiding part of the turnover, HMRC will assess the tax bill and charge interest on late payment.

If you fail to disclose the truth to HMRC and it is discovered, higher fines and interest will be imposed.

Getting more help

If you are unable to afford the debt or interest due to health or personal circumstances, you can proactively inform HMRC.

Alternatively, click “Get Help” on GOV.UK to seek additional assistance and support.

If you are unsure how to respond to this letter, you can consult a professional accounting team.

You can also contact our team of accountants for any other tax-related questions.

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