As an employer in the security industry, you must meet your payroll tax obligations.
Some employers in the security industry are not correctly declaring their contractor payments and group members. This has resulted in significant payroll tax liabilities.
You can read our case studies to find out more.
If your business is part of a group, you can only claim one threshold.
If your business is connected to another business, it’s possible that they’re grouped even if there’s no common control or common ownership. Businesses may be part of a group if they have common employees. For example:
You can read our grouping case studies to find out more.
If you have an employment agency contract with your client, you’re an employer and liable for payroll tax. If you employ security guards to work ‘in and for the conduct’ of your client’s business, you might be considered an employment agency and cannot claim contractor exemptions.
To determine if your security guards work ‘in and for’ your clients, we consider:
If your security business is not an employment agency, you may be able to claim contractor exemptions.
Before you apply the contractor exemptions, check if any of your contractors are employees. If they’re actually employees, you cannot claim a contractor exemption.
The payroll tax anti-avoidance provisions apply where an arrangement reduces or avoids liability for payroll tax. There does not need to be proof the arrangement was intentional. What matters is the effect the arrangement has on the payroll tax liability.
We examine the facts and circumstances of your security business to work out whether to apply the provisions.
We disregard any arrangements, including contracts, when the payroll tax anti-avoidance provisions apply. Your security business is then considered an employer and all payments are taxable wages. We’ll send out a notice with all the details.
You should conduct an internal review of your security business to determine the correct payroll tax treatment of payments made to all your security guards.
If your taxable wages exceed the monthly payroll tax threshold in the current financial year, or the last four financial years, you must register.
If you have not declared all liable amounts in your monthly payroll tax return for the current financial year, include these additional amounts in your annual reconciliation return. Please note the due date for the 2019/20 Payroll Tax annual reconciliation has been extended to 30 October 2020.
If you did not declare all liable amounts in previous financial years, contact us to make a voluntary disclosure. Voluntary disclosures attract a reduced level of penalty tax compared to cases where we identify the understatement.
If you have a question about the security industry and cannot find the answer on this website, contact us.