Not subject to, or to the right of, supervision, direction, or control by any person
SDC – Government restricts Tax Relief on Travel & Subsistence
Under new Government measures that took effect from April 6th 2016, tax relief for home-to-work travel expenses & subsistence will not be available to contractors & other temporary workers who are subject to, or to the right of, Supervision, Direction, or Control by any person. ("SDC").
Who will be affected?
Any worker who supplies their labour via an intermediary, such as a recruitment agency, umbrella company or personal service company who falls with scope of this new legislation.
What is changing?
The temporary workplace travel rules currently allow temporary workers to obtain tax relief for their home to work travel provided that attendance at the workplace is for a temporary purpose and of limited duration.
As of April 6th 2016, Government have removed the ability to process tax relief on temporary workplace travel & subsistence for the workers who are subject to the supervision, direction or control as to the manner of which services are supplied
What exactly is SDC?
Supervision is someone overseeing a person doing the 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 his/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 how the work is done, as it 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.
How will this affect the industry & temporary work force?
Temporary workers will still be able to claim tax relief on temporary workplace travel provided that it can be proven that the worker is not caught by SDC.
Temporary workers caught by SDC will be offered alternative solutions from the Lesters portfolio to accommodate the changes.
How will this affect Personal Service Company Workers?
Workers with their own limited companies (PSCs) who are outside of IR35 will not be subject to the SDC test and will still be able to claim tax relief on temporary workplace travel.
Those who operate inside of IR35 will likely to be considered caught by SDC and will not be able to claim tax relief on temporary workplace travel.
For more information, please contact Lesters by either calling on +44(0)208 735 6370, emailing in on enquiries@lesters-uk.com or, by completing the contact us form.