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Supervision, Direction or Control? HMRC Guidance Published

As of 6 April 2016, much-discussed changes to travel and subsistence relief have taken effect.  

Travel and subsistence expenses are tax deductible if they are incurred in connection with qualifying business travel. As of 6 April 2016, where a worker personally provides services to another person under an arrangement involving an employment intermediary, each assignment is now to be treated as a separate employment (such that the worker will not benefit from travel and subsistence relief). This will only apply where the worker is under the supervision, direction or control (SDC) of any person, or the right of SDC.

HMRC has published updated guidance on the meaning of SDC in the Income Tax (Earnings and Pensions) Act 2003 (ITEPA). The guidance can be viewed on the following link: 

https://www.gov.uk/government/publications/employment-intermediaries-personal-services-and-supervision-direction-or-control/employment-intermediaries-personal-services-and-supervision-direction-or-control 

There is no legal definition of the meaning of SDC. The words therefore take their ‘ordinary meaning’ and the new guidance provides further clarification as to how HMRC will interpret them and determine whether the SDC test is met. 

According to the guidance, HMRC considers that those who work in a regulatory environment, including health care workers such as doctors and nurses, social workers and social work assistants, teachers and teaching assistants, will be subject to SDC. 

In addition, the guidance provides updates for agency workers and detailed examples of the conditions which must be met in order for the agency legislation to apply. The guidance clarifies that the conditions can still be met when the contract between the client and the agency does not specifically name which workers are to personally provide their services. 

It remains to be seen just how great an effect the changes to travel and subsistence relief will have on the recruitment sector and agency workers.


This bulletin is for general guidance purposes only and should not be used for any other purpose.

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