Supervision, direction and control (SDC)
Supervision, direction and control (SDC) was introduced by HMRC in 2016 to effectively put a stop to umbrella company employees from claiming travel and subsistence expense. Well, not all umbrella company employees – but most of them.
HMRC decided that workers operating through an intermediary (such as an umbrella company) were claiming travel and subsistence expenses that permanent employees couldn’t. Therefore, they introduced SDC. Arguably, their way of levelling the playing field. To put it simply, HMRC thought most intermediary workers were effectively operating in the same way as permanent employees.
If a temporary worker is subjected to supervision, direction or control when they’re carrying out their duties – they’re not eligible for travel and subsistence expenses because they are – in the eyes of HMRC – operating like permanent employees.
We’ll quickly summarise what supervision, direction and control are.
A temporary worker is subjected to supervision if they’re overlooked when undertaking some or all of their duties. The “supervisor” will ensure the temporary workers are doing their work correctly and as per the terms of the contract.
Direction applies when somebody tells a temporary worker how to do their job, or instructions, rules, and guidelines are being handed out.
Control occurs when a temporary worker is told what they need to do and are effectively micro-managed. The temporary worker could be moved elsewhere and asked to conduct other duties – without having a say.
Travel and subsistence
SDC relates to claiming travel and subsistence expenses. But what are travel and subsistence expenses? We’ve put a summary together.
- Work-related travel costs
- Not normal commuting
- Travel from the main office to a temporary workplace
- Journey from home to a temporary workplace
- Must occur as a result of a business-related trip
- Hotels and other overnight stays (work-related)