Relevant Contracts Tax (RCT) sets out the special tax rules for subcontractors who work in the construction industry and how payments must be handled by contractors.
TaxAssist Accountants work with numerous contractors and are equipped to deal with your needs efficiently. By making sure we are always up-to-date with any changes to the RCT regulations we can notify our clients quickly of any changes that may affect them.
As a contractor, you are required to meet specific obligations under the scheme, including registering with Revenue, checking whether your subcontractors are registered with Revenue, paying subcontractors, deducting tax and submitting monthly statements confirming these payments.
Services we provide for contractors:
- Register you with Revenue as a contractor
- Verify your subcontractors with Revenue
- Ensure you pay your subcontractors correctly within the scheme
- Supply deduction statements to the subcontractors
- Keep your records in good order and supply Revenue with monthly returns
- Make sure you do not incur penalties by failing to submit your monthly returns to Revenue.
If you are a subcontractor, your main obligation is to register with Revenue. You must also keep Revenue informed of any changes to your business, such as changes to your business address, business name, business partners and other relevant information.
Services we provide for subcontractors:
- Determine your status as a subcontractor or employee, (or both) and register you with Revenue accordingly
- Verify you with Revenue on behalf of your contractor
- Manage and organise your business records
- Prepare your end of year self assessment tax return and calculate your tax liability/refund where applicable
Any contractor that you work for must determine whether or not you are to be treated as employed or self-employed for each and every contract. If you are an employee for the purpose of the contract, the contractor will need to operate a PAYE scheme whereby tax and PRSI will be deducted from the payments made to you.
If you are self-employed, Revenue will register you as a subcontractor under the RCT scheme and they will set you up to receive payments 'under deduction'. This means contractors must make a deduction of tax of either 0% or 20% (35% for non compliant subcontractors) from your invoices and pay it over to Revenue.
Under the RCT system you do not have to charge VAT on sales to a contractor, but you can reclaim VAT on purchases.
We're here to help
Whether you are the contractor or the sub-contractor, your local TaxAssist Accountant can help you keep your RCT affairs in order. We have over 23 shops and offices across Ireland, making us easily accessible to you. Contact us today to book your free initial consultation with your local accountant.
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