What is “Supervision, Direction or Control” (SDC)

Since April 6, 2016, umbrella employees can no longer offset their full range of expenses if they are under Supervision, Direction, or Control (SDC) or the right of. If there is genuinely no SDC, then the workers will be able to claim back the expenses at the end of the financial year via self-assessment. The only exclusion is that mileage can be offset weekly or monthly if there is no SDC.

For us to determine the SDC status, we will need to look at whether the worker is subject to, or the right of, Supervision, Direction or Control by anyone in the manner in which you provide your services whilst working on an assignment. As part of the assessment, we must also request written confirmation from an authorised person at the end client to confirm if they agree or disagree with the evaluation.

If you are subject to SDC, we can’t pay certain expenses for the duration of the assignment, so it’s really important that we get the correct status.

When HMRC considers whether the provisions of the agency legislation apply to a person’s job, they look at whether or not that person has the freedom to choose how they do their work, or instead, does someone have the power or authority over the worker to dictate how the work is done by imposing control over them, subjecting them to supervision, or giving them directions?
As a general rule, HMRC considers that agency workers who personally provide services to work in industries where the manner in which they work is governed by regulations or some other statutory framework or standards will be subject to the right of SDC, and it is likely that in practice, they will be subject to SDC. That is because somebody will have the right to check that their work complies with those standards. To check that the workers are complying, somebody will need to have the right to supervise their work and, if appropriate, direct or control how the worker does their work. The types of workers will include but are not limited to health care workers such as doctors, nurses, social care workers such as social workers and social work assistants, teachers and teaching assistants.

If you would like to know more about the detailed guidance from HMRC on SDC, please refer to this HMRC link.