SARS Clarifies What Security Expenses Can Be Claimed – Here’s What Accountants Need to Know
SARS released the updated Interpretation Note 45 (Issue 4) on the Deduction of Security Expenditure providing clear guidance on what businesses—and their accountants—can and can’t claim when it comes to securing property, assets, and people. The guide is effective from 25 March 2025.
The new guide confirms that not all security costs are tax deductible. Here's how to tell the difference:
✅What is Deductible (as operating expenses):
Salaries of on-site security guards
Monthly armed-response fees
Subscription to vehicle tracking systems
Costs for guard dogs used in a trade
These are considered recurring and business-related expenses under section 11(a)—provided they are actually incurred in the production of income.
🚫What is Not Deductible:
Security costs for private homes (unless a part is used exclusively for business)
One-off, capital improvements like installing electric fences or CCTV systems
Donations made to security-focused organisations (unless qualifying under section 18A)
Capital items might not be deductible under normal rules, but they could qualify for:
Wear and tear allowances (section 11(e))
Capital gains base cost additions (if related to a private residence)
🧾 Donations vs. Contributions
Contributions to anti-crime initiatives may qualify for a deduction—but only:
If the recipient is an approved PBO under section 18A
Or if there's clear advertising value (like a sponsorship deal)
A standard donation with no commercial return? Not deductible unless made to a qualifying entity and supported with a valid section 18A receipt.
👨👩👧👦 Employer-Funded Security for Employees
If a company pays for an employee’s home alarm or bodyguard, it may trigger a taxable fringe benefit. Make sure to:
Disclose it on the employee’s IRP5
Understand whether SARS sees it as a benefit under the Seventh Schedule.
📌 Tips to Accountants and Tax Practitioners
Before claiming security costs for your clients:
Ask: “Is this expense linked directly to income-generating activity?”
Check if it’s a once-off capital improvement or a recurring service
Keep records of donations and ensure section 18A receipts are issued.
