Supervision, Direction and Control (SDC) is used to help determine the employment status of a worker (in regards to IR35) and whether they can claim travel and subsistence expenses whilst working through an ‘employment intermediary’ – a recruitment agency or umbrella company.
Whilst there is no legal definition of SDC, it can be described as follows:
- Supervision: whether there is someone to oversee the worker carrying out their work, or someone to ensure that the work is being done and to the required standard. Supervision could also mean assisting the worker to develop their skills on the job.
- Direction: this entails providing instructions or guidance to the worker as to how the work should be done, or coordinating when and in what amount of time the work needs to be done.
- Control: similarly to Direction, this involves someone having the power over how a worker does the job. It also entails being able to move the worker from one job to another.
This legislation can be confusing. If you are unsure if you are suited to using an umbrella company because of SDC, contact us via our online form.
Supervision, Direction and Control in relation to working through an umbrella company can affect whether you are able to claim travel and subsistence expenses. In 2016, the government changed the law to stop contractors being able to claim these expenses unless their working circumstances illustrated that they were not subject to SDC.
You can still claim travel and subsistence expenses for tax relief in certain situations, for example if you are a mobile worker. This could mean travelling to a few different sites in the course of a week for your contract work, or commuting to a place that is considered a temporary workplace or not part of regular commuting.
Some recruitment agencies or end-clients will reimburse expenses directly to a contractor, and this will be prearranged in the contract terms.
Travel expenses may include journeys between worksites, travel between home and temporary worksites, and normal commuting.
Subsistence expenses may consist of food, drink and accommodation costs incurred during a trip directly related to your work.
In many cases if you are legally able to claim these expenses through an umbrella company, you will have agreed a limited with your end-client and/or recruitment agency.
Do you have any questions on how an umbrella company works? Contact us and we will happily provide you with more details.