Reviewed by Ryan Carman ATT, Head of Operations at RIFT Tax Refunds

If you work in security you spend your days helping and protecting others. But you need to protect yourself too. Especially if you’re a self-employed security professional. 

Whether you work in private security, event security or cyber security, you can reduce your tax and save money in the process. We’re talking security work tax refunds, allowable expenses, and more. Here’s how you can do it.

Self-employment and tax considerations for security guards

So, first of all. Can a security guard be self-employed? The answer to that is of course, yes. Many businesses hire freelance security guards rather than employing them. You may work for a number of clients on a self-employed basis. If you work in cyber security for example, you may work as a self-employed consultant advising a range of businesses.

Regardless of whether you help with physical or virtual security, if you’re self-employed you need to pay tax. And where tax is involved, it pays to understand your options and where you can potentially save money.

How you pay your tax

First of all, you’ll pay your tax every year through a self-assessment tax return. You need to register as self-employed with HMRC and you’ll get a unique tax reference (UTR) number from them, which enables you to submit a tax return.

You can do this online at the site, and you’ll need to get yourself registered by the 5th of October.

You must complete a self-assessment tax return by 31st January for the tax year that ended in the previous April. So for the tax year ending 5th April 2024, you’ll need to submit a tax return by 31st January 2025.

How much you need to pay

You pay tax on your income, in line with the following thresholds:

Band Taxable income Tax rate
Personal Allowance Up to £12,570 0%
Basic rate £12,571 to £50,270 20%
Higher rate £50,271 to £125,140 40%
Additional rate over £125,140 45%

How you set up your business impacts the amount of tax you pay. Sole traders only need to complete a self-assessment tax return – the income you bring in is all the money you make from your business. For limited companies, the money you make goes into your business account and you then pay yourself through the company – usually a mix of salary and dividends. You’ll then have to pay corporation tax too.

Saving money on your tax: Understanding allowable expenses

When you run a self-employed security business, you’ll have various day-to-day costs. You can deduct some of these costs from your income before you work out your taxable profits.

Allowable expenses include:

  • Office costs: Stationary or phone bills.
  • Training courses related to your business: For example, courses that help you improve skills and knowledge you currently use for your business or that keep you up to date with technology used in your industry.
  • Advertising and marketing: Including website costs.
  • SIA licence fees.
  • Gear and uniform costs.

Mileage allowance

When you travel to temporary workplaces for your self-employed security jobs, you can claim back on your mileage. The mileage allowance from HMRC is set at the following flat rates:

  • Cars first 10,000 miles: 45p
  • Cars over 10,000 miles: 25p
  • Motorcycles: 24p

If you drove 15,000 miles to temporary workplaces in the last year, you can claim back a total of £4,500 for the first 10,000 miles (10,000 x 45p). For the remainder, you would be able to claim back £1,250 (5,000 x 25p). That’s a significant tax refund.

Expert advice from Ryan Carman ATT, Head of Operations at RIFT Tax Refunds

To put yourself in the best position to save money on tax, make sure you:

✔ Document everything
When claiming your mileage, HMRC wants you to be accurate. You can’t simply estimate your mileage, you’ll need to log every single journey you make. Record things like the date, purpose of the journey, start point, destination and total miles travelled.

✔ Remember your deductions
Be super clear on the expenses you can deduct and claim back. Remember this could be anything from your uniform and your SIA licence to any extra training courses. Keep receipts for everything you pay out as HMRC will want to see them.

✔ Pay into your pension pot
Using some of the income from your self-employed security business to pay into your pension pot not only helps you in retirement but it also reduces your tax bill in the here and now. Remember, your pension contribution is taken before you’re taxed, so you’ll end up paying less tax as well as saving for retirement. You can make a maximum of £40,000 a year in pension contributions.

✔ Plan your savings
When the money comes in, you need to be careful with your outgoings. You must save for your annual tax return so you have enough money to pay it once 31st January rolls around.
Plus, you’ll want to consider saving for the future too. Each year, you can save the following in a tax-free ISA:

  • £20,000 for ISA contributions
  • £9,000 for Junior ISA contributions
  • £4,000 for Lifetime ISA contributions

✔ Use an expert
When you run your own business, you do everything yourself. From the day-to-day security job, to finding more work and billing your clients. Outsourcing your tax affairs, rebates and refunds to an expert like RIFT Refunds takes it off your plate. And we bring our expert knowledge to the table to reduce your tax bill and make your money work harder.

At RIFT, our specialist accountants can take the hassle out of your tax affairs. We’ll work alongside you to help you understand where you can save money on your tax bill and get your self-assessment tax return boxed off for you accurately and in plenty of time with HMRC.

Get in touch with us today to find out more.