Q1. What is an SDC Assessment?
It is to clarify whether a worker is subject to Supervision, Direction & Control (or the right of) in how they perform their job. Supervision Direction & Control first came about in 2014 as part of the new ‘Agency Legislation’ and HMRC use it to determine a contractors self-employed status.
Need further info? Check out this article:
Q2. Why is SDC so important for Self-Employment?
The legislation means that an agency/employment intermediary must make the call on whether a worker is ‘caught’ by SDC……
- What if I am caught by SDC? An individual subject to SDC in the manner of their duties, would have to be taxed as PAYE.
- What if I am not caught by SDC? This would mean that you can operate as self-employed provided there is evidence (from the agency/intermediary) to prove your SDC test and/or employment status.
- What is the decision based on? A Collection of evidence to look at employment status indicators e.g. pay rate, job role, tickets/qualifications, work routine, SDC questionnaires etc.
- Why would I fail the SDC test? It could be a particular job role (unskilled, needs SDC), agency or end client view of role/duties (they are taking the risk!), answers to SDC questions.
Q3. What are the SDC questions asked per assignment?
The agency/intermediary must show evidence there is no SDC per worker, per assignment. If not, they could be liable for unpaid tax/NI if HMRC were to challenge them.
Q4. Will I always be paid National Minimum/Living Wage?
There are different rules per employment status….
Self Employed – NMW does not legally apply for self-employed, but you should always be paid above the rate. FCSA recommend a minimum of around £14p/h.
PAYE – Yes, by law you will aways be paid the NMW – a fixed rate for PEO and NMW + Employment costs for the Umbrella contract rate.
Q5. What options do I have for holiday pay?
If you are……PAYE
You have the choice on sign-up to accrue/save or advance/roll up your holiday pay each week. You can amend your choice at any point.
If you are……Self Employed
Self employed workers are not entitled to employment benefits such as holiday pay. You must be PAYE to benefit.
Q6. Can I request my saved holiday to be paid out?
Yes, whenever you like although it makes sense to take it when you are on leave. Alternatively, we will release your holiday pay with your P45 if you leave us.
Want to request holiday pay or check your amount? Contact us……
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Q7. Why do I pay two lots of NI on Umbrella PAYE?
You don’t, your ‘Umbrella’ pay rate should be uplifted enough to cover the costs of employment (of the Umbrella provider) besides your pay.
- Why is this?
O.K. so an Umbrella provider’s only income is what its workers generate, hence the need to cover employment costs within the pay rate. After ‘employment’ costs it becomes your ‘Gross Pay’ for tax/NI.
- Can I check that with HMRC?
Please do, compliant Umbrella companies do things right and
operate as HMRC would expect. Check out this article:
Q8. What contract will I be engaged on?
If you are……PAYE – You will be engaged on either an employment or worker contract with standard employment benefits available on both.
If you are…..Self Employed – You will be engaged on a Contract for Services with relevant self employed sole trader terms for CIS/non-CIS.
You can find out more on employment status here: