back to article UK arrests five for selling 'dodgy' point of sale software

Tax authorities from Australia, Canada, France, the UK and the USA have conducted a joint probe into "electronic sales suppression software" – applications that falsify point of sale data to help merchants avoid paying tax on their true revenue. A Friday announcement [PDF] from the Joint Chiefs of Global Tax Enforcement (known …

  1. ChoHag Silver badge

    > "So what might happen is that the customer orders a $60 steak and a $100 bottle of wine,"

    This off-the-cuff thought says everything you need to know about the tax man.

    1. johnfbw

      That they are American? (Working in the UK)

      1. Dabooka

        More about their typical spend

        The example could've been a 'beer and a burger' for £20 becoming chips and a coke for £9

        1. The Oncoming Scorn Silver badge
          Pint

          Re: More about their typical spend

          Does that mean it deflates Wetherspoons Beer & Burger deal price from 6.29GBP (4.99 Soft drink)?

  2. Anonymous Coward
    Anonymous Coward

    The kitchen staff have their own software

    That $60 steak, $3 horse meat.

    1. This post has been deleted by its author

      1. Anonymous Coward
        Anonymous Coward

        Re: $60 Steak?

        The quote was from an Australian so $60 = €38

        1. This post has been deleted by its author

          1. Rikki Tikki

            Re: $60 Steak?

            $60 probably only gets you 200g ... if you know a restaurant where you can get steak for $4 a kilo, please tell ..

            1. This post has been deleted by its author

              1. Terry 6 Silver badge

                Re: $60 Steak?

                Restaurant at the End of the Universe.

                1. This post has been deleted by its author

    2. The Oncoming Scorn Silver badge
      Meh

      Re: The kitchen staff have their own software

      Think I ate horse at Sercel in Nantes for two weeks.

      1. Anonymous Coward
        Anonymous Coward

        Re: The kitchen staff have their own software

        You ate lasagna for two weeks?

        My commiserations and respect.

        :)

      2. Elongated Muskrat Silver badge

        Re: The kitchen staff have their own software

        There's nowt wrong with horsemeat.

        Most people will certainly eat a lot worse before they get really hungry, and I'd pick it over McDonalds any day.

        As it happens, after the Findus horse-meat scandal a few years back, one of our local pubs was doing a nice line in "exotic meat" burgers. IIRC, as well as horse, which was very nice, they also had ostrich and kangaroo (both of which are commonly enough eaten to be found in supermarkets), alongside crocodile (like fishy chicken), camel (didn't try that one), and some sort of wild goat, which tasted, unsurprisingly, like goat.

        As long as it's ethically farmed, why not? Horses are certainly no more intelligent than some of the other animals we eat, such as pigs.

  3. Falmari Silver badge
    Joke

    UK exports

    "The J5's statement about its probe asserts that ESS originated in the UK, and the developers of the naughtyware later exported it to the USA and elsewhere."

    Nice to see the UK developers finding export options outside of the EU in post Brexit Britain.

    1. Strahd Ivarius Silver badge
      Devil

      Re: UK exports

      But they forgot to adjust the currency unit to local conditions, that is why they were caught...

  4. David Pearce

    Never try to cheat the tax man, it doesn't end well unless you are a billionaire

    1. seven of five Silver badge

      Death and taxes, my friends, death and taxes...

    2. Plest Silver badge
      Happy

      You owe the bank $1000, that's your problem.

      You owe the bank $1bn, that's the bank's problem!

  5. This post has been deleted by its author

    1. sitta_europea Silver badge

      Re: Oi! York!

      "...stop sending my tax returns to an address that I haven't lived at for 17 years?"

      Heh, HMRC decided that our business had changed its name. Of course it hadn't, it's only ever had one name for 38 years.

      It took two years to get it fixed, and then it was only because I'd registered as a software developer and in desperation I moaned about it to somebody with a brain on the HMRC dev team.

      1. This post has been deleted by its author

        1. Strahd Ivarius Silver badge

          Re: Oi! York!

          they can be reached by snail mail only, barring an encounter with a Frenchman...

  6. Doogie Howser MD

    If only

    The tax authorities were quite so on the ball getting money out of the likes of Amazon!

    1. Jimmy2Cows Silver badge

      Re: If only

      The big fish have big tax lawyers, and their executives can take the tax chiefs out for a nice dinner (nothing so paltry as a $60 steak and a $100 bottle of wine) while they discuss how much is owed.

  7. Valeyard

    Undoubtedly used in every "American sweet shop" in London

    1. Disgusted Of Tunbridge Wells

      And Turkish Barbers where I live.

      1. Ken Moorhouse Silver badge

        Re: And Turkish Barbers where I live.

        Do they shave prophets?

        1. BrownishMonstr

          Re: And Turkish Barbers where I live.

          Sorry, I am afraid to say you have got me lost, prophets?

          1. Anonymous Coward
            Anonymous Coward

            Re: And Turkish Barbers where I live.

            I think it's a play on the old joke about someone who thought Muslim people would be terrible at business because he'd heard they're not allowed to draw a profit.

            Profit/Prophet.

            Homophones.

            1. Disgusted Of Tunbridge Wells

              Re: And Turkish Barbers where I live.

              > Homophones

              Aren't they illegal for the duration of the world cup?

            2. This post has been deleted by its author

              1. Death Boffin
                Trollface

                Re: And Turkish Barbers where I live.

                I want to know where I can buy some of those computer breeches the IT press keeps writing about.

                1. yetanotheraoc Silver badge

                  Re: And Turkish Barbers where I live.

                  https://www.etsy.com/market/computer_pants

                  But if you wanted pants _for_ your computer, I dunno.

                  1. Happy_Jack

                    Re: And Turkish Barbers where I live.

                    Gender-neutral computer pants, no less!

                2. This post has been deleted by its author

  8. Disgusted Of Tunbridge Wells

    I find it funny that some people are running this software to reduce their reported earnings and other identical businesses are doing the exact opposite in inflate their earnings in order to launder money ( very possibly from the first group ).

    Does the software have an option to report falsely inflated earnings too? Untapped market if not...

    1. Anonymous Coward
      Anonymous Coward

      wouldn't it be wonderful if they could match those that want to reduce their earnings with those that do the exact opposite... we'd have class war at hand, no less.

      1. yetanotheraoc Silver badge

        it wouldn't be wonderful

        Don't cross the streams.

      2. This post has been deleted by its author

  9. Anonymous Coward
    Anonymous Coward

    designed and sold electronic sales suppression systems internationally

    I can't not think of brexit at this point (or at any other point, as a matter of fact ;) Yes, I know, 'this' has got _nothing_ to do with stimulating the true brit entrepreneur spirit having finally broken free from the shackles of the EU and all that, and yet... the spirit is storng with this one! Almost makes me proud ;)

    1. Anonymous Coward
      Anonymous Coward

      Re: designed and sold electronic sales suppression systems internationally

      Maybe this was the trade deal with Australia that was so great?

      1. Version 1.0 Silver badge

        Re: designed and sold electronic sales suppression systems internationally

        Maybe the politicians negotiating the new post-brexit Australian deal were having the discussion at a restaurant and one of the negotiators had the "app" ... "Wow, what a great deal, it's lowered our costs!"

    2. Old Tom

      Re: designed and sold electronic sales suppression systems internationally

      Bizarre that Brexit would cross anyone's mind on this subject (and you're not the first to mention it in the comments to this story).

      I guess it shows how deeply ingrained it has become among some to look for a Brexit angle in almost anything.

      1. fix

        Re: designed and sold electronic sales suppression systems internationally

        Maybe it's not looking for a Brexit angle in almost everything, instead it's because almost everything has been damaged by Brexit?

      2. yetanotheraoc Silver badge

        Re: designed and sold electronic sales suppression systems internationally

        "Bizarre that Brexit would cross anyone's mind on this subject"

        I'm left of the pond, and even I thought of Brexit....

        1. ravenviz Silver badge

          Re: designed and sold electronic sales suppression systems internationally

          We get to blame COVID now as well, what’s not to like?!

      3. John Brown (no body) Silver badge

        Re: designed and sold electronic sales suppression systems internationally

        "I guess it shows how deeply ingrained it has become among some to look for a Brexit angle in almost anything."

        It was mentioned in the article. It's hardly a surprise that it also gets mentioned in the comments.

  10. Stu J

    Interesting

    Anyone know what offence the developers of the software are suspected of having committed? I'm a bit out of touch with the latest legal situation, but I'd have thought that selling software that can be used by other people to do naughty things wasn't in itself illegal?

    Otherwise you'd think Microsoft would be on the hook for all the shenanigans that has doubtless been facilitated via MS Office over the past 25 years?

    1. jmch Silver badge
      Boffin

      Re: Interesting

      "selling software that can be used by other people to do naughty things wasn't in itself illegal?"

      If it's 'dual-use' and can be used for non-illegal purposes, probably not illegal. If it's only purpose is to facilitate crime, probably illegal. I'm pretty sure there's some added legalistic nuance in there, probably also varying by jurisdiction.

    2. Anonymous Coward
      Anonymous Coward

      Re: Interesting

      From the sound of it, the sole purpose of this software is to intentionally misreport earnings for tax evasion purposes, so it makes sense that it would be illegal. Can someone come up with any legitimate reason for such software?

      1. MiguelC Silver badge

        Re: Interesting

        In Portugal they used to have something called "training mode" in cash registers, where transactions would be inputed, invoices emitted, but nothing would be registered on the ledger.

        Then tax authorities decided that every last thing ever sold would have a unique invoice number tied to both the seller and, optionally or, above a certain threshold, mandatorily, to the buyer (who, in those cases, would get a small fiscal cashback of part of the paid VAT, meant for encouraging the buyer's voluntary participation).

        These kind of VAT frauds almost disappeared, although services not invoiced (cash-in-hand, as electronic payments leave a trace), and VAT carousel fraud are still very much alive.

  11. TimMaher Silver badge
    Windows

    BITD

    When I were a “college boy”, mates and I would sometimes volunteer to do click tests for our local Investigations Unit.

    We did a popular pub/club in South West London once.

    When the analysis was done, the IU discovered that they an extra cash till.

    Nice.

  12. aerogems Silver badge
    Holmes

    I always wonder

    How is it you go about marketing such a product? How does a potential "customer" even find it given it's illegal? It's not quite the same thing as buying some weed off a street dealer or something, this is something designed specifically to commit tax fraud. It's one thing if an individual business owner decides they want to start cooking the books, but to make a product specifically for that purpose and then sell it, internationally even, means they had to have some way of getting in touch with business owners who were also looking to actively commit tax fraud.

    And on a related note, I hope all the businesses that purchased this dodgy bit of kit were handed a bill by the tax man for both what they owe and some hefty fines on top. At least over here in the States, it's a real problem that companies large and small use every trick they can think of to avoid paying taxes. Which means our infrastructure is starting to fall apart, infrastructure companies depend on for the success of their business no less, but until there's some catastrophic failure no one will devote money to it. We can't educate our young people and things like QAnon fill the void because people don't know how to think critically. And companies like Apple (though they are hardly alone) sit on mountains of cash in various other locales because they don't want to pay any repatriation taxes. Even the guy who came up with the "maximize shareholder value" idea has disavowed it and said that corporate executives have taken it way too far.

    1. Anonymous Coward
      Anonymous Coward

      Re: I always wonder

      Let's not discount the politicians in this - that the Republicans pretty much starved the IRS of investigative funding was no accident, and neither are all the loopholes that exist.

      In the UK you have the problem that HMRC appears to be not accountable to anyone, so when they started to mess around with IR35 (because if you're not a gazillionaire you must bleed) and utterly screwed it up to the point that they themselves couldn't make sense of it nobody got it in the neck for it, and that's just one of many, many cases where they flat out mishandled things.

      I have no problem with being accountable for tax, but I think it's not much to ask that those who generate spurious tax bills for (as far as I can tell) no other reason than that they're bored or don't like people must have a mechanism by which they can be held accountable because they're causing harm. Tarring and feathering a couple of those would do a world of good.

      /rant

    2. martinusher Silver badge

      Re: I always wonder

      Based on history -- both recent and ancient -- there's really no shortage of money for things that the government is really interested in. It is, after all, just a matter of priorities and the reason why socially useful things are low priority isn't because of someone fiddling the VAT but because it isn't a priority and it has never been so. (Crotchety old geezer here, "seen it all before".)

      The fundamental problem with VAT is that its way too high. It was introduced in the UK to replace Purchase Tax because the EC used it and even at a relatively modest rate it collected much more money than the old Purchase Tax (which was levied only on "luxury items" and wasn't levied on services, utilities and the like). Many, many, budgets have come and gone since then, all with their emphasis on 'tax cuts to stimulate the economy' but somehow cutting the VAT rate isn't mentioned (and if it is its only a nominal cut). So everyone's stuck with a crippling indirect tax that is largely responsible for shifting wealth from ordinary people to the very well off.

      If VAT was reasonable then there would be less incentive to fiddle it.

  13. TimMaher Silver badge
    Holmes

    Fujitsu/ICL

    Could just have been crap code. Horizon anyone?

    1. yetanotheraoc Silver badge

      Re: Fujitsu/ICL

      Tagline: We don't know what our software does, but we can guarantee you won't overpay VAT.

  14. SloppyJesse

    > "So what might happen is that the customer orders a $60 steak and a $100 bottle of wine,"

    > Ford explained, at which point the software changes the transaction so it is recorded in the

    > point of sale system as "a $10 bowl of chips and a $4 bottle of soft drink."

    Obviously this is not the correct way to reduce tax.

    They should be opening the wine with a 'special' corkscrew, the use of which is licensed through a company registered in the Seychelles. $60 of the $100 therefore goes in 'licensing' to "Corkage.S.A.R.L." The steak was bought for $70 from "CMOT Dibbler Enterprises" registered in the Caymans, shipped via Luxemburg and sold at a loss

    Once you've taken into account the rental of the building (Owned by Mrs Oligarch via Bermuda) and the tables, cutlery, etc which are owned by "Tables And Chairs.Co" registered in Maryland you realise the restaurant is running at a loss and the owner a Mr Oligarch is actually running it out of the goodness of his heart.

    Mr Oligarch is a director in all the above mentioned companies, but you shouldn't worry about that. And since he isn't intending to stay in the UK on a permanent basis he retains his non-dom status so doesn't need to declare any income from those overseas companies.

    1. Anonymous Coward
      Anonymous Coward

      > Obviously this is not the correct way to reduce tax.

      Are you available for consulting?

      (asking for a friend, etc)

  15. JulieM Silver badge

    Been going on since forever

    For the period between when shop scales went electronic but still weighed loose foodstuffs in pounds, ounces and eights of an ounce, they were rigged to read heavy unless the reading was square on a whole number of ounces.

    That particular little scam had to come to an abrupt end when we joined the civilised world and started weighing things in kilograms, since it's possible to multiply two decimal fractions before the sales assistant has removed the goods from the scale platform.

    1. Korev Silver badge
      Pirate

      Re: Been going on since forever

      I go to a market every week for my milk, fruit and veg etc. Once an inspector turned up and tested all the stalls' scales. He got to the fruit vendor, saw they use a balance and weights, laughed and wandered off...

      1. Anonymous Coward
        Anonymous Coward

        Re: Been going on since forever

        > saw they use a balance and weights, laughed and wandered off

        And can you guess why? ;)

        1. Korev Silver badge
          Coat

          Re: Been going on since forever

          He couldn't be bother to weight around?

          1. Anonymous Coward
            Anonymous Coward

            Re: Been going on since forever

            I hope you're not going to be here all week. :)

            Nope, I reckon he must have known that weighs actually lose weight due to wear and tear. So the seller was probably losing out, albeit a very small amount.

            1. Ken Moorhouse Silver badge

              Re: So the seller was probably losing out, albeit a very small amount.

              Depends what material the weights were made of.

              If they were repurposed from a Fisher Price kitchen set then the vendor would be laughing. (I doubt whether FP would have a 25 kilo plastic weight in the set though).

          2. Ken Moorhouse Silver badge
            Pint

            Re: He couldn't be bother to weight around?

            My nomination for wittiest (weightiest) post of the week.

  16. Blackjack Silver badge

    Wut

    Wouldn't it make more sense to make it pass as a cheaper wine? I have seen wine bottles that are like 5 bucks.

    Yes really those exist... just don't expect quality.

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