What is SDC (Supervision, Direction or Control)?

This is something which came into effect in the spring 2016 Budget. It was decided that contractors that worked via an umbrella company or similar but subject to Supervision, Direction or Control (SDC), would no longer be able to claim expenses for travel/subsistence. HMRC refer to SDC being calculated according to whether you are free to decide how to do your job or does someone choose how you do it i.e. supervise, direct and control you. Below are the definitions of each element of SDC as set out by HMRC:


This applies if someone supervises the work that you do and makes sure that you are doing it in a certain way and to a defined standard. They may even assist you, helping to build your skills and knowledge base.


Applicable if someone makes you work in a certain way and directs you with guidance/instructions, ensuring that the work is done correctly. They may also coordinate how the work is carried out.


This can be said to exist if someone dictates what work you should do and how to go about it. Someone else may also have the ability to move you from one contract/location to another.


In order to assist contractors in deciding which group they fall into; SDC or non-SDC, HMRC have produce some scenarios. We have given details of these below and have related them to workers from different industry backgrounds. If you need further examples, you will find more on the HMRC site. However, do not worry too much as we provide you with a FREE detailed assessment which will enable us to ascertain which category you fit into.

Paul the IT Consultant

Paul works as an IT Consultant, designing websites for all types of businesses.

Scenario 1 – not subject to SDC

Paul has been offered an interview with a clothes retailer for a 14 day contract with them. They are looking for a designer to build them a new website that needs to be ready by a certain date. Paul is successful in obtaining the job for the 14 day period and is told he will have as much freedom as he needs, from the time he begins the job to the end. He will be allowed to design and publish the new website without instruction from anyone else. He can choose to work at a desk in their office or can work from his own base; there is no obligation for him to choose one or the other. He decides to work from home some days and at the clothes retailer’s office at other times. Nobody interrupts him and he is provided with a computer. The company have not asked that he provide them with updates, although he does so out of courtesy. He completes the new website by day 11 and then continues to monitor and refine it until day 14, when the project ceases.

Because in this scenario Paul has had complete freedom without interruption until the contract is complete and no-one has told him what to do, he is not subject to supervision, direction or control.

Scenario 2 – subject to SDC

Paul has been offered a 5-day job by a recruitment agency during which time he will join a company, working in their IT department. The IT Manager will oversee his work and supervise to make sure it is done properly. Paul will have to work from the company’s premises. On the first day, Paul is asked by the IT Manager to update the website; he is given detailed information and his work is overseen. Paul is asked to abbreviate some of the descriptions and this work takes 3 days. On day 4, Paul goes to the company’s Head Office to work with the IT Manager, gathering together performance figures. Paul is told to extract sales numbers from the database, all the time being overshadowed by the IT Manager who is ensuring that Paul does the work correctly. Paul then puts together an Excel document, all the time with the IT Manager monitoring and supporting him. This takes 2 days.

In this scenario, the company made it totally clear that Paul would be subject to supervision from the IT Manager. He was also under the control of the IT Manager as he told Paul what to do. From day one, Paul has been subject to supervision, direction or control.

You can read Paul’s full story on the HMRC website here.

Sarah the Locum Pharmacist

Sarah is a fully qualified pharmacist.

Scenario 1 – not subject to SDC

Sarah enjoys working as a locum pharmacist as she gets regular work plus lots of flexibility and a mix of locations. Her work comes via a recruitment agency. She accepts a job to provide 3 weeks’ cover for a private pharmacy. The owner tells Sarah she will be working in the rear of the store, dispensing prescriptions and giving advice to customers. There are two assistants who will help Sarah whilst dealing with customer sales and prescriptions. Sarah accepts the contract. She works for 3 weeks dispensing prescriptions and giving advice to the pharmacy customers. At the same time she monitors stock and tells staff if they need to re-order. In this scenario, Sarah is not subject to supervision, direction or control. As the most experienced employee, she does not have to answer to the sales staff nor do they have to oversee her duties.

No-one controls how she works as she does not need this. She is therefore not subject to supervision, direction or control.

Scenario 2 – subject to SDC

If Sarah had been hired to assist the owner of the pharmacy to dispense prescriptions and work with the sales staff, checking and ordering stock, then the proprietor would have had a right to and likely would have subjected her to supervision, direction or control so that she could provide her services in the way in which they were required.

To read Sarah’s full story, visit the HMRC website here.

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