HMRC’s SDC guidelines will interest contractors
The HM Revenue and Customs document in which the department will set out their guidelines on Supervision, Direction and Control is due to be published at the end of March. As one of the most eagerly awaited pieces of guidance, this is supposed to provide information to contractors on whether or not they are eligible for tax relief on their travel and subsistence expenses.
As one of the most controversial legislative moves of the current government, the planned changes to the way travel and subsistence expenses will be administered have caused consternation amongst contractors and businesses alike, but the application of the new rules all depends on HMRC’s definition of what constitutes ’employment’ versus ‘contracting’.
Extensive advice has been given to the government, whose previous efforts to define SDC were dismissed as ‘useless’ by experts who were expected to use the guidance to ascertain the status of the contractors they worked with.
With only a few weeks to go until the legislation will come into place, the guidance on how it will be applied is one of the most important elements for those who will need to know whether they will be affected.
The current guidelines used by HMRC all rely on precedents set in past cases, but they fail to provide comprehensive guidelines either by virtue of the lack of full transcripts of the judgements or because the verdicts showed that the individuals involved were not, in fact, employees and therefore weren’t subject to SDC.
The problems with proving a negative have been foremost in the ongoing discussions about the problems surrounding SDC, but HMRC has hinted that they might deem entire groups of workers to be outside the legislation, although they wouldn’t be drawn on which sectors that might effect. The legislation threatens to render umbrella companies relatively unworkable as they could end up simply being outsourced PAYE operators, depending on the scope of the changes brought in.
If you are wondering what on earth this all means for you and your finances, our guide to contractor expenses is a handy guide to what you can and can’t claim. Anyone considering working for themselves, perhaps as an IT contractor, can use our contractor take home pay calculator to give them an idea of what they could be earning.
For more detailed advice on how best to organise your finances given the changes due to be implemented in the coming months, our friendly team of accountants is always on hand to offer advice and support. Call us today on 01442 275789 or email firstname.lastname@example.org.