Cash Registers

Cash Registers and the obligation to maintain proper books and records to determine tax liability or entitlement to deductibility

1. Introduction

This information leaflet is intended for all businesses that use a cash register or Electronic Point Of Sale (EPOS) system. This information may also be of benefit to (tax) consultants and suppliers of software used in electronic cash registers or EPOS systems. Information on the retention of Revenue records in electronic format was previously issued in Tax Briefing, Issue 46 in December 2001 (see pages 24 and 25).

The statutory obligations to keep records for tax purposes are set out in Section 886 of the Taxes Consolidation Act, 1997; Section 16 of the Value Added Tax Act, 1972; and Regulation 8, of the Value Added Tax Regulations, 2006 (S.I. No. 548 of 2006) (as amended by the VAT Regulations S.I. No. 238 of 2008).

The purpose of this information leaflet is to highlight changes to Regulation 8, which came into effect on 2nd July 2008.

Copy of Regulation 8(1) (a), (b) as amended by the VAT Regulations S.I. No. 238 of 2008.

2. Obligation to keep records

The statutory requirements in relation to VAT set out the extent to which every accountable person is obliged to keep up to date a full and true record of all transactions that may affect their liability to tax and/or entitlement to deductibility.

In respect of payments receivable from VAT registered persons (mainly other businesses), the records must include the amounts in respect of every transaction for which an invoice or other document is required to be issued, with a cross-reference to that invoice or document.

In respect of payments received from persons not registered for VAT (mainly non-business customers), a daily total of the consideration receivable must be retained. This total must be cross-referenced to any relevant records or documents (such as cash sheets and stock control reports) that are in use for the purpose of the business. From July 2008, where an EPOS system or electronic cash register is used, a complete record of each entry on that register or system must be retained and each entry must include a sequential number that uniquely identifies the entry, together with the date and time of such entry.

Cash register records and supporting documents, either paper or electronic, are generally required to be kept, in a readable format, for a period of 6 years (see Section 16 of the VAT Act). This should be borne in mind when purchasing an electronic cash register to ensure it has the memory capacity to meet both the needs and tax obligations of the business.

Records may be stored by an electronic process, provided that the records can be displayed, printed and reproduced in an intelligible form. These records must be stored in such a manner as to make them readily accessible for subsequent reference. This requirement is set out in Section 887 of the Taxes Consolidation Act, 1997 (which also applies to VAT) and in Regulation 10 of the Value Added Tax Regulations 2006, (S.I. No. 548 of 2006), which deals with electronic invoicing.

3. Cash Registers

A cash register or EPOS system, which is either standalone or networked, is a business tool to record details of receipts for sales easily and accurately. Cash registers issue receipts and maintain details of each transaction either electronically or on a till roll. There is a wide range of makes and models of electronic cash registers available for use in business and each performs a variety of different functions, from logistical support to gathering statistics and performing checks and balances on cash transactions. In using a cash register or EPOS system, businesses acknowledge the need to properly record all transactions and sales associated with the business.

Cash register transaction records, both electronic and in paper format, enable businesses to balance their accounts on a daily or periodic basis. They also form part of the books and records of the business, which a business is obliged to keep when complying with their tax obligations.

4. Requirements for Retailers

The following checklist will assist retailers in checking that their cash register or point of sale system meets their business requirements and their tax obligations.

4.1 Cash Register or EPOS system

Organisation of books and accounts

Does your cash register meet the obligation to keep records considering the nature, size and complexity of your business activities?
Will you be able to control the business processes using this cash register?

Transaction Data

Does your electronic cash register record and retain entries in electronic format, and are all entries uniquely identifiable by sequential number, date and time? This is mandatory from July 2008.
Can the transaction data be electronically audited?
Has the electronic journal or tally roll been retained?

Note: The statutory obligations are that all transactions are capable of being produced or reproduced for a period of 6 years. Where data was recorded electronically, you should retain it electronically, and you must be able to produce or reproduce it at short notice. Where the electronic cash register has insufficient memory capacity for holding all data, you should make regular backups to another medium.

Reporting

Does the cash register have the capacity to make reports to meet the demands of the business? Are these reports retained?

For example: Z total reports.

The Z total reports are summaries of certain data, and therefore they do not contain any detailed data at transactions level. The Z total reports and all data supporting the reports will need to be retained. Transaction data can be retained by means of the electronic journal or the tally roll. Does the transaction data state the amount, date, time and unique sequential number? This is mandatory from July 2008.

4.2 Management of cash register data

Accessibility of data within a reasonable period of time.

Is the data being retained in such a manner that it is in a legible format and accessible within a reasonable period of time where a Revenue inspection is being conducted?
Can the data be independently verified?
Can the data be reproduced within a reasonable period of time in the event of a system upgrade or where a new (cash) payment system has been introduced?

System settings

Are the details of the system settings being retained?
Are changes to the system settings recorded with the transaction data?

Memory Capacity

Does your cash register have sufficient memory capacity to retain all transaction data for a period of six years? If not, you must upgrade your memory capacity or back up the transactions data in such a way that it is capable of being reproduced in both electronic and printed format.

Replacing a cash register

Can your new cash register restore electronic transaction data from the old cash register, EPOS storage system or backup devices? If not, the cash register to which the original data relates will need to be retained until the retention period for the records on the backups has passed, or the data transferred in its entirety to another medium that can recreate the data if required.

4.3 Security of cash register data

Securing data

Is the transaction data secured against inappropriate changes later on?
When securing the transaction data from the electronic journals or the cash register tally rolls, the data must be secured in such a way that the data will not be lost and cannot be manipulated.

Audit trail

Is the data retained and secured in such a manner that changes to the original data can be traced?

Back-up

Is the data properly physically secured in the event of fire, theft or breakdown etc?
Archive procedures should ensure the integrity and readability of electronic transaction data throughout the storage period. Where data is encrypted the business should ensure that the encryption keys are held along with the data.

If you have any questions regarding the capabilities of your cash register, contact the supplier of your cash register and/or software provider.

5. Requirements for the Revenue Commissioners

Cash registers and point of sale systems, together with the records created or produced by them, form part of the records required to be retained by a business for tax purposes. These registers or systems and associated records may be required to be produced for inspection by the tax authorities at any time. In particular, in the event of a Revenue visit they may be subject to inspection. The electronic cash register and point of sale system records are required to have the date, time and sequential number that uniquely identify each transaction. This is mandatory from July 2008.

Failure to comply with these obligations can result in prosecution, the charging of interest and penalties on any underpayment of tax and inclusion on the tax defaulters’ list for publication.

6. Further Assistance

Having read this information leaflet, if you have any questions:

As a retailer contact your local Revenue Office
As a tax agent please contact your client’s local Revenue office or for technical issues contact Revenue’s Technical Services through the My Enquiries.
As a software provider for cash registers please contact Revenue officer Eoin Gibson on 053-9149456.
On any Revenue operational policy in relation to this information leaflet contact Revenue officers: Sean Nolan on 01-4244277, or John Morrissey on 01-4244322.

Note: This information leaflet is intended as an explanatory note only and not a definitive interpretation of either the VAT Regulations, VAT Act or the Taxes Consolidation Act.

7. Information on the Distribution of the cash register leaflet.

The Information Leaflet was distributed in April 2010, under:

Letter to VAT customers

Letter to Representative Bodies

Letter to cash register and software suppliers.

Version of Cash Registers Information Leaflet

PDF Version of Cash Registers Information Leaflet

Revenue Information Note