From April 6th 2016 the test for employment intermediaries to follow when concluding whether travel and subsistence (T&S) expenses can be paid to a worker is whether a person has been subject to supervision, direction or control (SDC) by their engager or any other party. With HMRC issuing its latest guidelines on the subject it seems to suggest an unnecessarily harsh set of conditions must now be fulfilled should anyone wish to obtain T&S expenses:
Everyone is subject to SDC unless proved otherwise
To obtain T&S it must be proved that the engager has not exercised “control” (signed waivers / generic statements will not suffice)
The occasions in which HMRC will accept there is no SDC still needs to be tested at a tax tribunal
When will SDC apply?
If engager checks how worker is undertaking tasks
NOT if it is just to ascertain if work meets the standard being paid for
Control will include moving a person from their job
If procedures/methods/instructions are in place the SDC test will be met
Health and safety regulations in and of themselves will not count as SDC
Standard industry regulations however will satisfy SDC
The last of these tests is subject to a great deal of confusion. The rationale behind health and safety regulations not amounting to SDC are that they apply to both employees and the self-employed. However if this is the case surely the same could be argued for on-site rule?
The current guidelines are sure to cause confusion and uncertainty. It should be noted however that they are just that, guidelines and prone to change as the Finance Bill 2016 makes its way through Parliament. Until then it will fall to the tax tribunals to make sense of and decide upon just how narrow they will interpret the current state of affairs