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HMRC internal manual

National Insurance Manual

Class 1 NICs: expenses and allowances: security licence fees

Regulation 25 and paragraph 11 of Part 10 of Schedule 3 to the Social Security (Contributions) Regulations 2001 (SI 2001 No 1004)

As part of its efforts to reduce crime the Home Office introduced the Private Security Industry Act 2001. Under that Act people working in the private security industry have to be licensed. The sorts of occupation involved are nightclub door staff, security guards, wheel clampers, private investigators, security consultants and keyholders.

In accordance with the Act the Security Industry Authority requires that with effect from March 2004 all door staff must register and pay a licence fee.

Tax relief has been provided in respect of the cost of these licences by adding the fees to the table of allowable fees and subscriptions at section 343 of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003) (previously section 201 of the Income and Corporation Taxes Act 1988).

As regulation 25 and paragraph 11 of Part 10 of Schedule 3 to the Social Security (Contributions) Regulations 2001 specifically provide a disregard for payments deductible for tax purposes under section 343 of ITEPA 2003, it follows that the inclusion of security licence fees in that provision also extends the NICs disregard to such costs if they are met or reimbursed by an employer.

You should not, therefore, include in gross pay for NICs purposes any payment made by an employer in connection with the cost of a security licence which is required by the Security Industry Authority.

See NIM05695 for general information about the NICs disregard applicable to the payment of fees and subscriptions for members of professional bodies and EIM32880 for information about the tax position.