The line sits deep in the Budget document, under a heading that reads "Clamping down on till fraud." The government "will introduce mandatory software standards for Electronic Point of Sale and Mobile Point of Sale systems to tackle electronic sales suppression ," it says. HMRC "will engage with stakeholders and publish a technical consultation in summer 2027, setting out detailed implementation proposals."
That is two sentences in a very long document. I read them twice because they are among the few Budget measures aimed squarely at payments and till software. For firms that sell tills and card readers to small shops, an open question has become a commitment.
I went looking for the background and found HMRC's consultation, published on 23 June 2026. It ran for 8 weeks and closed on 18 August. Its lead official was Mathew Kelly of HMRC. I have not seen a summary of responses yet. The Budget line reads as the government's answer to it.
The consultation defines the problem plainly. Sales suppression "is when businesses manipulate digital sales records to hide or reduce the value of transactions, lowering their reported turnover and tax liabilities." HMRC says it happens most in small retailers, takeaways and hospitality.
There is one case study I keep thinking about. Investigators found hidden functions in certain versions of a till's software. The owners could later swap high-value items sold for cheaper ones in bulk, "at the press of a few buttons on the terminal," and the audit trail then showed the lower amounts.
The money explains the move, as far as I can see. HMRC's paper cites a 2016 report putting one form of suppression at £100 million of tax losses. A broader 2019 report concluded that "the risk of VAT losses alone could be in excess of £450 million a year."
Enforcement has grown, but it cannot scale. The National Audit Office found HMRC's yield from this work rose from £17 million in 2022 to 2023 to £98 million in 2023 to 2024, as cases went from 253 to 1,275. With more than half a million businesses in the riskiest sectors, HMRC calls one-to-one investigation "not sustainable or practical."
The UK starts from zero, which surprised me. "Currently, there are no mandatory standards for EPOS or MPOS systems in the UK," the consultation says, though many providers support the idea, as seen in Austria, Germany and Norway. It counts 16 of the 37 OECD countries that require tills to generate and keep cash sales data, and 5 of those also require automatic transmission to the tax authority.
I expected card payments to shrink the problem. HMRC argues the opposite. The paper cites British Retail Consortium data showing debit cards rising from 32% of retail payments in 2013 to 62% in 2023. Every card payment in a shop runs through a point of sale system, and HMRC says that "increases the risk of ESS being conducted."
My reading is that the cost lands on vendors first. HMRC notes that "there are now a range of low-cost systems available making the operation of an EPOS or MPOS system viable for even the smallest businesses." Those cheap systems are the ones most likely to need rework, and their makers often compete on price.
Respondents to HMRC's 2018 call for evidence suggested tamper-proof sales records, systems that store data online straight away and sending sales data straight to HMRC. Only 11 replies came in then, and I found that number small. I suspect the June consultation drew more, because the stakes for vendors are now clearer.
For anyone valuing a POS software business, the question is which design HMRC picks. A locked transaction log is a software update. Direct reporting to HMRC is a much larger build. The Budget does not say which, and I cannot tell from either document. I still do not know whether the standard will reach card-only terminals or stop at tills that keep sales records.