Tick Tock Tax O'Clock

The UK’s private security industry is under heightened scrutiny as HM Revenue & Customs (HMRC) intensifies its compliance efforts.

There are seismic changes ahead... that could affect you!

September is Coming…

Over 12,000 security companies across the country have received letters urging them to address issues related to tax compliance, employment status, and payroll practices. This initiative is part of HMRC’s broader strategy to recover approximately £1 billion in unpaid taxes.

Why the focus on the Security Industry? The private security sector has been identified as a high-risk area for tax non-compliance. HMRC’s taskforces are zeroing in on security companies, conducting intensive investigations, including on-site visits to uncover discrepancies and enforce compliance.

VIEW THE LETTER HERE

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Are you 100% sure that your security company is compliant?

Are their Door Supervisors and Guards self-employed?
Self Employed workers are not entitled to the National Minimum Wage, sick pay, holiday pay, are not covered by other Employment Protection laws and are out with the scope of the European Working Time Directive. This means that they are more vulnerable to exploitation.

Do they use labour providers?
When security companies use labour providers or subcontractors, there is a risk of non-compliance. Failure to adhere to employment laws and proper vetting procedures can lead to significant legal and financial consequences. Operators who engage with security providers must ensure that the subcontracting or labour arrangements do not expose them to liability or reputational risks.

Do you know the hidden dangers of working with a non-compliant security company?

Legal and Financial Penalties

Businesses may be held liable for unpaid taxes or National Insurance contributions if their security contractors fail to meet obligations. Non-compliance can result in insurance claims, especially if workers are misclassified or if there are breaches in employment law.

Reputational Damage

Association with non-compliant firms can tarnish your brand’s reputation. Clients may question your company’s due diligence and commitment to ethical practices. It can also lead to negative publicity as media coverage of compliance breaches can have long-lasting effects on public perception.

Operational Disruptions

Non-compliance can lead to service interruptions as investigations or sanctions against your security provider can disrupt services. Your business may also face audits or inspections due to associations with non-compliant firms.

Are you putting yourself at risk of a hefty fine and criminal prosecution?

Do you facilitate a fraudulent supply chain?

Chasing the cheapest security contracts can inadvertently support a fraudulent supply chain. Suppliers forced to meet rock-bottom rates may cut corners by underpaying tax and National Insurance, creating serious compliance risks.

If HMRC uncovers fraud within your supply chain, you may receive tax-loss letters and face demands to pay arrears, spanning up to 4–20 years. HMRC can deny your VAT input tax under the Kittel ruling if they believe you “knew or should have known” you were connected to VAT fraud.

Corporate Criminal Offence (CCO) charges under the Criminal Finances Act 2017 may follow if your associated persons facilitate tax evasion, and you lack adequate prevention procedures.

The bottom line? To protect your business, don’t just choose based on price. Ensure your security providers are properly accredited, transparent in payroll, and compliant with tax and National Insurance. Implement robust supply chain due diligence and prevention procedures to shield your business from financial, legal, and reputational risks.

What to look for in a security provider… Don’t choose a Big Joe!

When selecting a security partner, ensure they:

Adhere to Tax and Employment Laws: They should be fully compliant with PAYE, National Insurance, and employment status regulations.

Verify Industry Accreditations and Risk Management Practices: Ensure the security provider holds relevant industry certifications. Additionally, the provider should conduct thorough risk assessments and provide detailed assignment instructions tailored to your specific needs, ensuring that all security measures are proactive, documented, and aligned with best practices.

Maintain Transparent Operations: Clear documentation and open communication about compliance practices are essential.

Undergo Regular Audits: Routine internal and external audits help ensure ongoing compliance.

How can you ensure the integrity of your security supply chain?

You should perform due diligence to enable you to make a judgement on transactions and the integrity of your supply chain.

Protect your business by testing the credibility, legitimacy, legal and tax compliance of your suppliers and labour supply.

Know your own risk – legal, financial, tax and social obligations, and those of your supplier.

Check your risk by performing a risk assessment, check their tax and legal compliance as well as any modern slavery or exploitation risks.

Carry out due diligence on your suppliers.

If risks are identified do not ignore them. Act to mitigate or remove them completely by understanding the length of your supply chain and what the relationship is between the workers and the provider of the labour.

Effective risk-based due diligence needs continuous monitoring and review

It is recommended that you carry out due diligence checks to help safeguard your business from financial, operational and reputational risks.

Don’t let time run out.

Ensure your compliance before the deadline.

Is your security company on the ACS Approved Contractors Register?

Professional Security currently holds SIA Approved Contractor Scheme (ACS) status for the provision of Security Guarding and Door Supervision.

The Approved Contractor Scheme (ACS) provides a recognised hallmark of quality within the private security industry.

We have been recognised in our field as a leading Contract Security Guarding Company and achieved a score during our annual audit, that puts us in the top 1% of security companies in the UK.

We have proved that we are market leaders in the security guarding industry and are therefore capable of providing an excellent standard of services to our clients and a high degree of care for our employees.