HMRC’s approach to the investigation of retail businesses that use cash registers

Aficionados of the 1970s sitcom Open All Hours will recall the unpredictable and often violent nature of the manual cash register operated by Ronnie Barker’s Arkwright and David Jason’s Granville.

Forty years on readers may be surprised to learn the use of electronic cash registers (ECR) or electronic point of sale (EPOS) systems is not mandated by HMRC for retail businesses. While tax regulations and company law require businesses to keep records (including digital records) they do not extend to requiring retail businesses to use ECRs. HMRC does not receive data from businesses directly from ECRs or EPOS systems.

It is perhaps unusual for retail businesses of any size not to have a cash register but it is often the nature and type of ECR which potentially gives rise to increased risks of tax non-compliance.

In 2019 the Organisation for Economic Co-operation and Development...