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Posted 8th June 2018

Understanding supervision, direction and control

For the agencies we work with, a thorough understanding of supervision, direction and control is essential when working with the contracting community. A contractor’s SDC status will determine what expenses they can claim back as well as which route is the ideal solution for them when working with Exchequer.

Below we take a look through SDC to help you refresh your memory on what it means for both agencies and contractors alike.

supervision, direction and control

What is SDC?

New rules were introduced in April 2014 with regards to supervision, direction and control. This meant that if a contractor was deemed to have SDC status, then they could no longer be part of the government Construction Industry Scheme (CIS) from April 2014. Further changes in April 2016 meant that contractors that fall within SDC are also no longer able claim back travel and subsistence expenses.

How does SDC status affect contractors?

Simply put SDC means that if a contractor is being told HOW to carry out their work, or someone has the right to tell them HOW to do it then they are likely to fall under SDC status and will not be able to claim back travel and subsistence or be engaged on a CIS basis.

However, if a contractor is hired under the expectation that they know HOW to carry out their work, and there is no one within a business that has the right to dictate HOW work should be done, then they are likely to pass the SDC test.

Most contractors at this stage will be highly familiar with the SDC test at the beginning of each contract and will be well versed in working alongside agencies and their umbrella partner to analyse contracts prior to any agreement to ensure that they reflect their SDC status.

Contractors that fall within SDC and are required to travel substantial distances, will find the inability to claim travel expenses to have a significant impact on their take home pay, and may wish to reconsider the contracts they undertake.

Still unsure about SDC? We are more than happy to talk to agencies and contractors alike to discuss the SDC test process. Contact our friendly team today to find out more.

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