Supervision, DIrection and Control (SDC)

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What is Supervision, Direction and Control?

Published on Tuesday, June 27, 2017

Written by Andrew Trodden

Supervision, Direction and Control (SDC) came into effect on 6 April 2016 as a way of limiting the number of umbrella contractors being able to claim travel and subsistence expenses. Do you know what SDC is and whether or not you are subject to it?

The introduction of the new rule has seen a significant decrease in the number of contractors working through an umbrella company able to claim tax relief on travel and subsistence expenses.

HMRC believed that a substantial number of contractors working through umbrella companies were in fact being treated identically to employees in permanent positions with the same client.

As a whole, tax relief is not available for home-to-work travel and related subsistence to workers in a permanent role. This is, as of April 2016, the same for contractors working through umbrella companies. There are provisions, however, and this rule could be modified or disapplied in circumstances where the place of work classifies as a temporary workplace, or where travel and related subsistence is not considered standard commuting or private travel.

How is SDC defined?

HMRC has come up with the following definitions for Supervision, Direction and Control:

  • Supervision is someone overseeing a person doing work, to ensure that person is doing the work they are required to do and it is being done correctly to the required standard. Supervision can also involve helping the person, where appropriate, in order to develop their skills and knowledge.
  • Direction is someone making a person do is/her work in a certain way by providing them with instructions, guidance or advice as to how the work must be done. Someone providing direction will often coordinate the how the work is done, as it is being undertaken.
  • Control is someone dictating what work a person does and how they go about doing that work. Control also includes someone having the power to move the person from one job to another.


What are travel expenses?

For the few umbrella contractors who are still able to claim travel expenses, these include:

  • Travel that is necessary in order for you to do what your assignment requires
  • Journeys to a worksite and travel from a worksite (this excludes normal commuting)
  • Travel between your home and a temporary worksite (from home to the temporary worksite and from a temporary worksite back home again)


If you are able to claim travel expenses, it is likely that you will have agreed on an amount with your client before your assignment commenced. HMRC has a series of guidelines that can be found on their official website.

What are subsistence expenses?

Subsistence expenses are the expenses that may arise when you are on a business trip. These include:

  • Food
  • Drink
  • Accommodation


Just like with your travel expenses, if you are able to claim subsistence expenses, it is likely you will have agreed on a limit with your client that is in accordance to HMRC benchmarks.

Is there an assessment to determine my SDC status?

Providing the umbrella company you use is a reputable provider, they will be able to offer you support to confirm whether or not you are subject to SDC when carrying out the requirements of your assignment. During the registration process, you will be asked a few questions about your responsibilities and your working environment. If your answers suggest you are not subject to SDC in the workplace you will be required to complete a more thorough questionnaire. It is vitally important that you answer these questions honestly to ensure there are no retrospective punishments from HMRC because of suspected tax avoidance.

If I am subject to SDC, does this mean no expenses at all?

Unfortunately, being subject to SDC completely removes the ability for umbrella contractors to claim tax relief on travel and subsistence expense. However, if you are a mobile worker, you will still be able to claim travel expenses for the transport between temporary worksites.

Why should you still consider using an umbrella company?

Since SDC was introduced, umbrella companies may seem like a significantly less attractive payroll option than contracting though a limited company. Whilst it is true that using an umbrella company is not the best way to maximise your take home pay, there are still plenty of benefits available to the contractors who use them. These include:

  • Access to employee benefits including Sick Pay, Annual Leave, Paternity Pay and Maternity Pay.
  • Providing you use a compliant umbrella company, you will receive your PAYE salary with the correct tax and National Insurance deductions made on your behalf.
  • Public Liability, Employers’ Liability and Professional Indemnity insurances are usually included.
  • Minimal administration, because the umbrella company will take acre of a majority of it for you. You will only be required to complete your timesheets, upload them to an online portal and send a copy to your recruitment agency.


If you are interested in finding out more about SDC or would like an impartial consultation from an industry leading umbrella company – call Churchill Knight Umbrella on 01707 871622 or contact us here.

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