Tax Changes for Door Security Staff enforced by HMRC
HMRC are writing to 13,000 security providers to check that they are taxing workers correctly. Companies need to ensure that the right tax and national insurance contributions are being correctly deducted and paid to HMRC.
All door security staff need to be registered on PAYE. The HMRC are cracking down on criminal gangs and unscrupulous employers exploiting workers and the system. Security businesses and hospitality venues will need to class their door staff as employees, not self-employed, and therefore they are obliged to all the benefits that come with an employee contract. The appropriate taxes need to be paid per employee, including door staff, as to avoid any penalties.
For venues which utilised subcontractors, businesses must identify who is responsible for PAYE payments. They must then ensure that the tax and NIC is being paid accordingly, to avoid possible prosecution. Any discrepancies in pay must be identified and rectified.
Are door staff classed as employees or self-employed?
The purpose of this enforcement is to increase understanding that door staff are classed as PAYE employees in the eyes of HMRC. Disagreements would require sufficient evidence that security personnel are self-employed.
Indeed, factors which determine the employment status of an individual revolve around their responsibilities and relationship with the employer. Determining factors include whether the staff are given duties or instructions by the employer, whether the individual possess their own security business, their financial risk and payment structure, as well as the terms of their contract.
Door supervisors require an SIA licence regardless of employment status, as this is a mandatory requirement for the job. It is an employer’s responsibility to check security staff have an in date SIA licence, whether they are employed or hired – alongside criminal record checks. Individuals who do not have an SIA licence is a key indicators they are not being taxed through PAYE.
What do the PAYE changes for Door Security Staff mean for Nightlife Venues?
Nightlife venues need to fully understand their contractual relationship with their door staff. In the eyes of the HMRC it is likely they will be deemed as the employer, which means the nightlife businesses are responsible for income tax and NIC payments. Other benefits which need to be upheld is workplace pensions, tipping, HR responsibilities.
Nightlife venues which hire subcontractors will need to perform their due diligence and check the individual is PAYE registered through the third party. HMRC will require transparency and can hold businesses responsible if they are found to be in breach of their lawful obligations – knowingly or unknowingly.
The importance of Employers’ Liability Insurance for nightlife venues.
It is a legal requirement for any business who employs staff to have a minimum of £5million employers liability coverage. A certificate which provides evidence of this policy must be on display at all times.
If venues utilise an agency to acquire their door staff, it is the responsibility of the agency to have employers’ liability in place. However, exceptions are made when and if the agency worker is operating under the venue manager’s instructions. In this case, the agency workers could still be deemed as directly employed, and therefore placing the employer venue at risk. It’s best to check the policy definition of ‘employee’ with your insurer.
Employers’ liability is important because if a door security staff member get injured while on site, they are obliged to claim against their employer for possible negligence. This will then fall upon their legal employer, determined to be either the agency or the nightlife venue.
Both self-employed workers and agency workers can be deemed as employed by the venue in certain circumstances. Furthermore, employees will need to be declared with the insurer, and the number of employees and the nature of their roles can impact the cover limits. Because of the nature of a door staff member’s role, they will need to be specified by the nightlife business’s insurer as a high-risk employee.
It’s clearly a complex area of employment law, with critical implications upon a client’s liability. A good example of hospitality businesses deemed liable for the actions of their hired door staff is the case of JD Wetherspoon PLC vs Burger 2025. The case rested on the degree of control exercises by the nightclub management over the doorman, conflicting with the doorman’s contractual independence. Read the full case study here to see a clear example of how employment law is not as straightforward as it seems, and that ‘employee’ status is very much dependent upon a multitude of factors.
What should nightlife venues do to protect themselves from HMRC penalties and door security staff liability claims?
At NDML, we want to ensure all our nightlife clients are safeguarded against emerging risks and liability claims. Here are our 5 key steps to reducing the likelihood of a HMRC penalty and liability claim from an employee:
1. Audit your door staff and security contracts
Make sure your door staff are registered on PAYE and classed as an employee. This may require background checks and an outline of roles and responsibilities. Check out HMRC CEST test and review tax obligations where appropriate.
2. Ensure documentation is in order
Compliance across national income contributions needs to be documented. As do pension enrolments, and security qualifications.
3. Discuss employment status with your security agency
Do your due diligence and make sure you are using a reputable security agency. Ensure they have their workers registered on PAYE. Discuss with them insurance and liability, and the qualification of workers, as well as employment status, for full transparency.
4. Review your insurance with a broker
Check your employers’ liability cover includes door security staff. Utilise the services of an insurance broker to ensure there are no gaps in your policy and that your venue and your staff are fully covered.
NDML are the UK’s dedicated insurance broker for nightlife venues and offer a free confidential review of any business’s insurance terms.
5. Train your team
Ensure you have an educated and certified Health and Safety Officer, HR department, security team, leadership team and bar staff. Payroll, contractual obligations, responsibilities, and health and safety need to be understood and delivered.
Workplace training and documentation reviews are available from Sentient HR. Sentient are a HR and health and safety outsourcing service.