CH194660 - Electronic sales suppression: penalty for making, supplying or promoting an electronic sales suppression tool: level of penalty – matters taken into account
A person found to be making, supplying or promoting an electronic sales suppression tool will be liable to a penalty of up to a maximum of £50,000. HMRC can take different matters into account when calculating the amount of a penalty.
To enable HMRC to tackle electronic sales suppression fairly and proportionately, it is HMRC policy to take the following matters into account.
We will first consider the tool’s nature and functionality, including its overall degree of concealment within the Electronic Point of Sale (EPOS) / Electronic Cash Register (ECR) system; and how both the manipulated data and the original true data are retained and identifiable within the system.
We will categorise the electronic sales suppression into one of three different complexity levels reflecting this, each with their own percentage range of the maximum penalty that will be applied; and reflecting whether the person’s disclosure was prompted or unprompted
| Nature of electronic sales suppression tool | Unprompted | Prompted |
|---|---|---|
| Low complexity | 10% - 40% | 20% - 40% |
| Medium complexity | 30% - 80% | 45% - 80% |
| High complexity | 50% - 100% | 70% - 100% |
Examples of the features of electronic sales suppression falling within the three complexity levels are
- Low complexity: Electronic sales suppression functionality is present within the POS / ECR system and is easily identifiable as such through documentation or instructions. The details of the original transactions continue to be held within the system and it is easily apparent as to which and how the electronic sales suppression tool has manipulated the data to produce the suppressed values.
- Medium complexity: Electronic sales suppression functionality is present within the POS / ECR system but is not documented and does not have instructions; or alternatively the electronic sales suppression tool is not an integral part of the POS / ECR system but is present within the same IT environment. The original transaction data might not remain available, but it is apparent how the data was manipulated by the electronic sales suppression tool and its functionality to arrive at the suppressed values.
- High complexity: Electronic sales suppression functionality is not within either the local POS / ECR system or same overall IT environment; and is introduced or run remotely (for example, across the internet from another location) or from a separate device (for example, removable media or temporarily connected computer / mobile phone). The original and manipulated data might no longer be accessible and it is not apparent how the electronic sales suppression tool has specifically manipulated the data to arrive at the suppressed values
Reductions within the penalty range for telling, helping and giving
The penalty figure can then be reduced from the maximum figure within the penalty range, depending on whether the person has assisted our compliance check, usually known as ‘telling, helping and giving’ (see CH194990).
The calculation and application of penalties must involve an authorised officer at an early stage and will require the approval of the authorised officer. (This content has been withheld because of exemptions in the Freedom of Information Act 2000)