Chancellor told that ‘SDC’ examples for contractors are useless

An industry body, All Umbrella Companies Are Equal, has told the Chancellor George Osborne that the HMRC guidance on the controversial matter of ‘Supervision, Direction and Control’ is ‘absurd and unfair’ when it comes to being applied to the contractors’ expenses claims. In an attempt to reach out to the Chancellor ahead of his 2015 Autumn Statement, AUCAE have followed the HM Revenue and Customs guidance to its logical conclusion, demonstrating that the examples used provide little to no benefit to anyone who is attempting to ascertain their status.

With the new regulations set to take hold in April 2016, there are serious concerns that the lack of case law which supports the use of SDC as a determining factor in a case to ascertain someone’s status. The AUCAE are also keen to point out that HMRC is using the control test alone when judging people’s status, despite the fact that, on its own, control is not considered a determinative factor. With a number of factors which should be considered, using control alone flies in the face of the judicial authority which has established that it should be only one of a number of factors that are considered when considering a contractor’s status.

With no legal definitions to rely on for clarity, AUCAE have analysed HMRC’s guidance in an attempt to drill down to the heart of their own definitions, but it’s proving more difficult than many might imagine to get a clear picture of where SDC begins and ends. Because it is only to be expected that a client will exercise some level of supervision, direction and control over a contractor who is engaged on a project, so being able to give a clear definition of when that tips over into employment as opposed to legitimate contracting.

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