Reply to: SDC

[realaledrinker]

When you get agencies like Oliver James in Manchester insisting that SDC doesn't apply to you because 'you aren't managing staff' you tend to lose hope.

[dsc]

But I also can't see why there would be any difference between determining SDC for IR35 and determining SDC for allowing expenses via an Umbrella.

Exactly this, thank you for stating it much clearer than I did previously.

I'm sure there's various scenarios of going via umbrella instead of ltd, but my comment was in relation to the SDC statement and how it's different when used for IR35 and different for determining if expenses are allowed through an umbrella.

[MrButton]

Where giant (together with the rest of the supply chain, when possible) can obtain evidence that SDC (Supervision, Direction and Control) does not apply to you, 'home to work' travel and subsistence expenses can also be claimed.

Good luck with giant. I’ve read bad things.

[LondonManc]

I understand what the differences are between the S, D and C in SDC, I just can't see how this SDC applied to umbrellas is then different to what is classed as "control" when it comes to IR35. And this then brings me back to what cojak touched on before, if your contract is deemed inside due to SDC and you are engaged via umbrella, how can you then claim that SDC doesn't exist to be able to claim expenses?

You can go umbrella and your contract be outside if you simply cba with the whole limited company thing; your significant other might have a good job or limited co of their own and you just want to take home your cash at the end of each month without worrying about the whole accounting/corporate side of things.

[Paralytic]

I understand what the differences are between the S, D and C in SDC, I just can't see how this SDC applied to umbrellas is then different to what is classed as "control" when it comes to IR35. And this then brings me back to what cojak touched on before, if your contract is deemed inside due to SDC and you are engaged via umbrella, how can you then claim that SDC doesn't exist to be able to claim expenses?

You could go Umbrella without a previous determination, and not be under SDC of the client (eg, banks that have banned PSCs)

But I also can't see why there would be any difference between determining SDC for IR35 and determining SDC for allowing expenses via an Umbrella.

[dsc]

I understand what the differences are between the S, D and C in SDC, I just can't see how this SDC applied to umbrellas is then different to what is classed as "control" when it comes to IR35. And this then brings me back to what cojak touched on before, if your contract is deemed inside due to SDC and you are engaged via umbrella, how can you then claim that SDC doesn't exist to be able to claim expenses?

[WTFH]

Based on the above imho the two are exactly the same, so still not sure where the differences are.

OK, how about this:

Supervision: Client tells you that for the project they need a program written to meet a particular business requirement and you need to write it in C++. It will be approved for functionality within the project team before being handed back to the business. You get a functional specification document.

Direction: Client tells you that for the project they need a program which you need to write it in C++. You get a functional spec and a technical spec. It will be approved by a senior programmer before being handed back to the project team.

Control: Client tells you that for the project they need a program which you need to write it in C++. You get a technical spec and instructions to use particular pieces of code. It will be reviewed at a line level by a programmer before being handed to the project team.

(This isn't a perfect example, but maybe it helps)

[dsc]

For supervision to apply there must be someone overseeing another person doing the work to ensure that they are actually doing it and that the work is being done correctly to the required standard. Supervision can also involve aiding or assisting someone to develop their skills and knowledge.

Direction involves someone making another person do their work in a certain way, generally by providing instructions, guidance and advice as to how the work is to be done. Someone providing direction will often coordinate how the work is done as it is being undertaken.

Control is where you have someone dictating what work a person does and how they should go about doing that. This also includes the power to move the worker from task to task as priorities change.

Control for IR35 status assessment focuses on the how and whether an end client has a right to tell an individual how to perform the services.

Based on the above imho the two are exactly the same, so still not sure where the differences are.

[LondonManc]

The test for IR35 is around control.

The test applied to determine whether someone working through an Umbrella can claim costs for travel and subsistence is SDC (supervision, direction and control) they are not same thing (although they do look a lot alike) and this company has offered only Umbrella or PAYE, effectively sidestepping the legislation by not assessing the status of its contingent workers.

As I said, an abdication of responsibility then.

[Patrick@Intouch]

How are they different?

For supervision to apply there must be someone overseeing another person doing the work to ensure that they are actually doing it and that the work is being done correctly to the required standard. Supervision can also involve aiding or assisting someone to develop their skills and knowledge.

Direction involves someone making another person do their work in a certain way, generally by providing instructions, guidance and advice as to how the work is to be done. Someone providing direction will often coordinate how the work is done as it is being undertaken.

Control is where you have someone dictating what work a person does and how they should go about doing that. This also includes the power to move the worker from task to task as priorities change.

Control for IR35 status assessment focuses on the how and whether an end client has a right to tell an individual how to perform the services.

If an individual uses their own methods and processes then there would be a lack of control which would indicate a lower risk of IR35 applying. BUT if that same individual is supervised by an employee of their client then SDC could be said to apply giving a situation where someone could be outside IR35 but subject to SDC. Importantly the SDC test would only be used in an Umbrella situation to determine whether they could claim expenses for travel and subsistence.

[dsc]

The test for IR35 is around control.

The test applied to determine whether someone working through an Umbrella can claim costs for travel and subsistence is SDC (supervision, direction and control) they are not same thing (although they do look a lot alike)

How are they different?

[Patrick@Intouch]

If you can prove you're not under SDC then you can be deemed as outside IR35. Sounds like a proper abdication of responsibility by the client.

The test for IR35 is around control.

The test applied to determine whether someone working through an Umbrella can claim costs for travel and subsistence is SDC (supervision, direction and control) they are not same thing (although they do look a lot alike) and this company has offered only Umbrella or PAYE, effectively sidestepping the legislation by not assessing the status of its contingent workers.

[Madocks2]

Yes, that’s why it doesn’t make sense.

OP, I’m not saying that you don’t make sense, just the situation that’s been presented to you.

I think this is the companies way of handing an olive branch, to determine us inside of IR35 is poop, so by letting us state we don't have any Supervision etc then we can still claim expenses for the short term left.

[cojak]

Yes, that’s why it doesn’t make sense.

OP, I’m not saying that you don’t make sense, just the situation that’s been presented to you.

[LondonManc]

Company is forcing us to go PAYE on half the rate or Umbrella and keep the rate;

The agency are "recommending" a umbrella company to use, which i'm sure the agent will be getting a back hander from.

This umbrella is offering SDC to all subbies, however when your contract turns 2 years then SDC is cancelled and then full PAYE is applicable to all income, including employers NI.

I cant find any legislation which states there's a timescale for SDC to apply, even if it was 2 years then surely termination of contract and new appointment under umbrella resets the 2 years?

Ive phoned 2 umbrella companies for advice, however they wont speculate on their SDC policies until after I have signed up and filled in the SDC questionnaire.

Any advice welcome please

If you can prove you're not under SDC then you can be deemed as outside IR35. Sounds like a proper abdication of responsibility by the client.