What is SDC (supervision, direction, control)?

09 November 2021

As of 6th April 2016, HMRC introduced new legislation that affects tax relief on expenses for umbrella employees.  The primary objective was to reduce tax avoidance by contractors. 


The rules dictate that umbrella employees will no longer be able to offset their full range of expenses if they are deemed to be working under supervision, direction or control (SDC) or the right of.

For the purposes of the agency legislation, HMRC considers supervision, direction and control are best defined as follows:

Supervision (S) 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 develop their skills and knowledge where appropriate.

Direction (D) is someone making a person do their work in a certain way by providing them with instructions, guidance, or advice on how the work must be done. Someone providing direction will often coordinate how the work is done as it is being undertaken.

Control (C) is someone dictating what work a person does and how they go about doing that work. It also includes someone having the power to move the person from one job to another.

Are You Affected?

When HMRC are considering if the provisions of the agency legislation apply to workers, they are looking at whether or not that worker 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 those 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. 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 job.  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.

Assessing SDC

If you are working via an umbrella company, you will need to assess your (SDC) status before you start your assignment to determine whether travel expenses will have tax relief applied to them or not. To help find out your (SDC) status, most umbrella companies will ask you to complete an SDC questionnaire when joining.

If there is genuinely no SDC, you will be able to claim back expenses at the end of the financial year. The only exclusion is mileage, which can be offset on a weekly or monthly basis if there is no SDC.

How can SmartWork help?

As a SmartWork employee, you have the option to submit your expenses via our online portal, where we track and log your submissions. With this information at hand, we can, of course, assist you in claiming the tax relief at the end of the tax year.

Please visit our downloadable guide here for a complete guide to claiming expenses.

As always, if you have any questions or would like to know more about how SmartWork can help you, please speak to one of our business managers by calling 0800 434 6446 or e-mail info@smartwork.com.

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