The Government is moving ahead with plans to introduce mandatory software standards for EPOS and MPOS systems in a bid to tackle tax evasion
Following a consultation launched in June 2026, the Government published its response in October 2026, confirming its intention to introduce new standards.
For retailers, this could mean changes to existing till systems, increased software costs and tighter requirements around how sales transactions are recorded and stored.
What is Electronic Sales Suppression?
Electronic Sales Suppression (ESS) is the deliberate manipulation of electronic sales records to hide transactions and understate business income.
For example, a retailer could process £1,000 in sales but manipulate their till records to show only £800, potentially reducing their VAT and tax liabilities.
This can involve deleting transactions, altering sales records or using specialist software to conceal sales.
The Government has already introduced legislation to tackle the manufacture, supply and use of software designed to facilitate sales suppression. However, it believes further preventative measures are needed.
What is the Government proposing?
The new approach focuses on making EPOS and MPOS systems more secure and transparent.
Proposals include:
Tamper-proof records: Systems should maintain secure transaction histories, making it harder to delete or alter sales without detection.
Standardised reporting: Introducing consistent data formats, potentially using the OECD's Standard Audit File for Tax (SAF-T).
Software certification: Establishing standards and potentially a register of compliant EPOS systems and suppliers.
Improved receipts and reporting: Exploring ways to make transaction records easier to verify, including potential QR codes.
Greater supplier responsibility: Requiring EPOS manufacturers and software providers to ensure their systems meet the new standards.
Overall, there was support for stronger controls, although respondents raised concerns about costs, technical complexity and the impact on smaller retailers. Importantly, these are areas being developed rather than a complete set of confirmed technical requirements.
How will retailers be affected?
The impact will depend on the systems currently used and the final requirements.
Potential implications include:
Additional costs: Some businesses may need software upgrades or new till equipment, particularly if their existing systems are outdated.
Changes to record-keeping: Retailers may need to ensure refunds, voids, cancellations and adjustments are properly recorded.
Staff training: Updated systems and procedures could require additional staff training.
Greater HMRC scrutiny: More secure and standardised sales records could make it easier for HMRC to identify discrepancies and carry out compliance checks.
There could also be benefits. Stronger controls may help create a fairer trading environment by reducing the ability of dishonest businesses to gain an advantage through undeclared sales.
What happens next?
The Government will continue working with retailers, EPOS suppliers and industry representatives to develop the detailed technical requirements.
A further technical consultation is expected in summer 2027. This should provide more clarity on:
The final software standards.
Certification and registration requirements.
How existing systems will be treated.
Retailer and supplier responsibilities.
Implementation dates and transitional arrangements.
No final implementation date or retailer compliance deadline has yet been confirmed.
What should retailers do now?
Retailers do not need to rush into replacing their existing tills, but there are some sensible steps to take:
Speak to your EPOS provider about whether your current system is likely to meet the proposed standards.
Check whether your software is supported and can be upgraded.
Review how sales, refunds, voids and cancellations are recorded.
Ensure your till reports reconcile with your accounting records.
Consider the proposed changes when planning future EPOS investment.
Summary
The Government's plans represent a significant step towards tighter regulation of retail technology.
While the technical requirements are still being developed, retailers should prepare for changes to how their EPOS systems record, store and report sales.
The next major milestone will be the technical consultation expected in summer 2027, which should provide a clearer picture of the costs, requirements and timescales.
For now, retailers should engage with their software providers, review their existing systems and keep up to date with further HMRC announcements.
