Accountant for Security Firms: Are You an Employed Guard, a Self-Employed Operative or Running a Firm?

Security work carries three different tax positions, and most people in the sector move between them. You might be a guard on a firm's payroll, a self-employed operative invoicing for shifts, or the person running the firm and placing others. The tax rules diverge sharply at that fork: the licence fee is deductible in one position and usually not in another, travel is claimable in one and not the other, and only the third position brings payroll and VAT registration into the picture. Start by working out which one you are in on the facts.

Which of the three positions are you in?

Decision point	Employed guard	Self-employed operative	Running a firm
How tax is paid	PAYE deducted by the employer	Self assessment, income tax plus Class 4 National Insurance	Self assessment or corporation tax, plus PAYE on staff
SIA licence fee	Generally not deductible, see below	Deductible against profit	Deductible as a business cost where the firm pays it
Travel to a site	Home to a regular site is commuting, not claimable	Site to site is claimable, home to a regular site is not	Mileage paid to staff within the approved rates is tax free
VAT	Not applicable	Only if turnover passes £90,000	Registration is normal once contracts scale
The first admin step	Check your tax code	Register by 5 October after the tax year you pass £1,000	Register as an employer before the first payday

The middle column is the one people get wrong, because the sector runs a mix of payroll staff, self-employed operatives and small firms subcontracting to each other, often on the same site on the same night.

Is an SIA licence fee tax deductible?

For a self-employed operative the answer is yes. You cannot lawfully take the work without the Security Industry Authority (SIA) licence, so the fee is incurred wholly and exclusively for the trade and reduces your taxable profit in the year you pay it. Training that renews an existing qualification sits with it; a first qualification that gets you into the sector is weaker ground and worth checking.

For an employee the answer is different and we will not assert it either way. Employees are taxed under a much stricter test in section 336 of the Income Tax (Earnings and Pensions) Act 2003, which asks whether the cost was incurred wholly, exclusively and necessarily in performing the duties of the job, not in order to be able to hold it at all. In practice that blocks most professional fees unless they appear on an HMRC approved list of deductible subscriptions and fees. If you are an employed guard paying your own licence, check the current HMRC list for your position before you claim, and keep the receipt either way.

Nothing here is guidance on licensing itself. Which licence you need, and how you keep it, is a matter for the SIA and your own compliance.

Are door supervisors self-employed?

Tax has two statuses: employed and self-employed. Employment law has three, because it also recognises workers with rights to holiday pay and the minimum wage. Those are separate systems. A worker finding in employment law does not make anyone an employee for tax and does not create a PAYE obligation.

Status for tax is decided on the working arrangements. The factors that matter are control over how, when and where the work is done; whether a substitute may be sent; mutuality of obligation, meaning whether the firm must offer work and the person must accept it; financial risk; the provision of equipment; and how far the person is integrated into the business. HMRC's Check Employment Status for Tax tool works through the same ground.

Applied to guarding, an operative who holds their own licence, quotes venues directly, turns down shifts and can send another licensed operative in their place is running a business. A guard on a published rota at a firm's rate, in the firm's uniform, with no right to send anyone else, is an employee whatever the contract calls them. Getting that wrong costs the firm, not the guard: unpaid PAYE and National Insurance land on the engager, with interest and penalties.

What a guard actually costs your firm

Build the loaded cost before you price a contract. Take a guard on £27,000 a year in 2026/27.

• Gross salary: £27,000
• Employer National Insurance at 15% on pay above the £5,000 secondary threshold (from 6 April 2025): 15% of £22,000, so £3,300
• Auto-enrolment pension at the 3% employer minimum on qualifying earnings between £6,240 and £50,270 (2025/26 thresholds): 3% of £20,760, so £622.80
• Total employment cost: £30,922.80

That is roughly 14.5% on top of the wage before payroll software, the employers' liability insurance the law requires you to hold, holiday cover and any sick pay exposure. If your firm has genuine employees beyond a single director, the Employment Allowance can absorb up to £10,500 of your employer National Insurance across the whole payroll, which on this example wipes out the £3,300 for the first three hires and then runs out. A single-director company with no other employees cannot claim it.

Overtime and night rates move the arithmetic, and they move it faster than most guarding margins allow. A rota built on paying a few hours of overtime each week rather than hiring is worth costing both ways, with employer National Insurance applied to the overtime too.

When does a guarding contract pull you into VAT?

Manned guarding, door supervision, keyholding, mobile patrols and alarm response are standard rated supplies of services at 20%. You must register once taxable turnover passes £90,000 in any rolling 12 month period, or when you expect to pass it in the next 30 days. There is no lower threshold for security work and no special scheme for it.

A firm placing three or four guards on a full-time contract crosses £90,000 within the first year, so plan for registration rather than discovering it late. Corporate and public sector clients recover the VAT, so registration rarely costs you those contracts. Small business and residential clients cannot recover it, and for them your price effectively rises by 20% on the day you register.

Subcontracting between security firms is a normal pattern and each firm charges VAT on its own supply where it is registered. If cash flow between raising an invoice and being paid is the real problem rather than the tax, our page on invoice finance for security firms covers the funding side.

Travel, night shifts and what an operative can claim

Travel is where self-employed operatives overclaim. Journeys between your home and a site you attend regularly are ordinary commuting and are not deductible, however unsocial the hour and however little public transport runs at 4am. Travel from one site to another during a shift, or to a genuinely one-off site, is business travel.

If you use your own car or van, you can claim the Approved Mileage Allowance Payment (AMAP) rates: 55p a mile for the first 10,000 business miles in the tax year and 25p a mile after that, from 6 April 2026. The 45p rate applied up to 2025/26 and should not be used for the current year. You pick either mileage rates or actual running costs plus capital allowances for a given vehicle, and the choice sticks for as long as that vehicle is in the business.

Kit that is genuinely specific to the job, such as a stab vest, torch, radio earpiece or high-visibility branded uniform, is deductible. Ordinary clothing worn under it is not, even if you only wear it on shift. Meals on a normal shift at a normal site are not deductible either; an itinerant operative travelling to genuinely temporary sites has a better case, and it is fact-specific.

One more date to hold: if your gross self-employment and property income combined was over £50,000 on your 2024/25 return, Making Tax Digital (MTD) for Income Tax applies to you from 6 April 2026, which means digital records and quarterly updates rather than one annual return. Our page on the MTD for Income Tax deadline sets out the thresholds and dates.

Where the firm decision usually lands

Most people move through these positions in one direction. You take shifts as a self-employed operative, you start placing other operatives on contracts you win, and at some point you are running a payroll and a VAT registration whether or not you planned to. The two triggers to watch are the £90,000 VAT threshold and your first employee, because each one adds a compliance track that runs monthly rather than annually.

Guarding is not the only labour-supply trade where those two triggers arrive together. The same pattern applies in contract cleaning, and our page for cleaning businesses works through the sole trader, limited company and taking-on-staff comparison in more detail. If you are still deciding whether to register at all, start with registering as self-employed.