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The Government changed the travel and subsistence expense rules for agency and Umbrella workers effective from 6th April 2016.
The changes restrict a worker's ability to get tax relief on his/her travel and subsistence costs unless it can be shown that the worker is not under the supervision, direction or control (SDC) of either the client, agency or PayStream in the way he/she carries out their work.
HMRC assumes that all agency and Umbrella workers are subject to SDC unless the agency or Umbrella company has gathered evidence to the contrary. Those working through personal service companies (PSCs) are not affected by these rules provided they fall outside IR35.
HMRC says 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.
PayStream note: a client checking, at the end of a job, that it has been carried out properly will not, on its own, amount to supervision.
HMRC says 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 is being undertaken.
PayStream note: if you have an expertise that the client does not it is unlikely that the client will be able to direct you as to how to do your job.
HMRC says 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.
PayStream note: if you are filling in for a full time employee who is sick or on leave it is likely that you will be subject to SDC.
SDC over where the work is done, what is to be done and when it is to be done does not mean you will be caught by the legislation; what is important is whether there is SDC over HOW the work is done. Click here for the latest HMRC guidance on the meaning of SDC and how to form a view if the SDC test is met.
We also review the contract(s) with the agency/client to check whether there is a right of SDC in the contract.
To determine if SDC applies, HMRC will look at:
I have to say that your people are great - I can seriously say that you are about one of the last companies in this country that still knows what the term customer service means.
N Gordon, IT consultancy