SDC - Employment status
Supervision, Direction and Control (SDC)
Employment Status Questionnaire
Since the 6th April 2016 umbrella employees are no longer be able to offset their full range of expenses if they are under supervision, direction or control (SDC) or the right of SDC in the manner in which they carry out their work.
If you are working via an umbrella company such as SmartWork you will need to assess your (SDC) status before you start your assignment in order to determine whether travel expenses will have tax relief applied to them or not
In order for us to determine the SDC status we 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 assignment.
When HMRC are considering if the provisions of the agency legislation apply to a persons job, they are looking 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 to health care workers such as doctors, nurses, social care workers such as social workers and social work assistants, teachers and teaching assistants.
In order for us to determine under the new tax rules if SDC applies we require the short questionnaire to be completed. When you have completed this it will be sent to our compliance team to review.
Once the series of questions have been answered this will hopefully allow us to determine the SDC status but if this was still not clear a further assessment would need to be carried out. This would incur gathering as much evidence as possible to help determine a contractor’s SDC status, granting equal consideration to each piece of evidence. This would allow us to look at the picture as a whole, reaching a reasoned conclusion in the process.
The review will also involve reviewing all contractual information to ensure that the employee is not subject to SDC. In addition to this, SmartWork will work with with the supply chain and request written confirmation from an authorised person at the end client to confirm that they agree with our evaluation if not subject to SDC.
If you would like to know more about the detailed guidance from HMRC on SDC please refer to this link.
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