Many umbrella companies give you the additional benefit of being able to reclaim travel to and from your temporary place of work and reclaim subsistence (including meals and any other necessary costs of travelling, e.g. parking charges, tolls, congestion charges or business phone calls).
This makes contracting much more efficient as these expenses are deducted before any tax and national insurance is applied. However, an umbrella company can only reimburse these expenses if the contractor and contract is not subject to Supervision, Direction and Control (SDC).
When a contractor works under the supervision, direction or control of another party, then they are an SDC contractor. This usually comes into effect when the relevant umbrella company offers to cover expenses. It can also be used to ensure that the quality of work carried is sufficient.
The supervision aspect of SDC usually involves working while being overseen by a superior. The direction aspect of SDC comes into effect if you are directed or guided while work is carried out. If work is dictated to the contractor, then they would come under the control remit of the SDC legislation. Part of SDC is to ensure that tax avoidance, in the form of fraudulent expenses, can be stamped out. It is also used to make sure that contractors are carrying out their work to the required standard.
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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.
is someone making a person do is/her work in a certain way by providing them with instructions, guidance or advice as to how the work must be done.
is someone dictating what work a person does and how they go about doing that work.
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