Reid was born in Paisley, the son of John Reid, a welder, and Betty, a supermarket worker. Apart from 3 years in New Zealand, he was brought up in the Gallowhill district of the burgh, and educated at St Mirin's Academy, where he was a fellow pupil of singers Gerry Rafferty and Joe Egan, and Stow College in Glasgow, where he studied marine engineering. After a failed attempt to launch a band with his brother Robert, a painter and decorator, he moved to New Zealand and then London.
For around 25 years he was the manager of Elton John, but their relationship ended over a leaked letter from his accountants detailing Elton's spending which was found by Benjamin Pell and published in the Daily Mirror. The ending of their business relationship in 1998 led to a legal action in 2000.
In Australia, Reid is best known as a former judge on the local version of The X Factor.