Umbrella Plus
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).
SDC Contractors
When a contractor works under the Supervision, Direction, or Control (SDC) of another party regarding how they perform their work, they are considered to be under SDC rules. This status affects tax treatment and the ability to claim work-related expenses.
HMRC introduced SDC legislation in April 2016 to prevent tax avoidance by restricting expense claims for contractors under SDC. If SDC applies to a contractor, they cannot claim tax relief on travel and subsistence expenses. If SDC does not apply, the contractor may be eligible to claim legitimate business expenses, subject to HMRC’s rules.
It’s important to note that an umbrella company offering to cover expenses does not determine SDC status. Instead, SDC is assessed based on the contractor’s working conditions and level of autonomy.
I am interested in PAYE Umbrella Plus
SUPERVISION
Involves someone overseeing the contractor’s work to ensure it is done correctly and to the required standard.
DIRECTION
Occurs when someone provides instructions, guidance, or advice on how the work should be done.
CONTROL
Applies when the contractor does not have full autonomy over how their work is performed and can be told what tasks to do and how to do them.
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