Relevant Contracts Tax - Changes in Finance Act 1999
(Construction, Forestry and Meat Processing Industry)
The 1999 Finance Act introduced important changes regarding the issue of relevant payments cards (RCT 47’s) to principal contractors in respect of a sub-contractor. At present the subcontractor must produce his C2 in person to the principal contractor and jointly apply on form RCT 46 to the Inspector of Taxes on form RCT 46 for an RCT 47. The principal contractor is not permitted to make payments without deduction of tax to the sub-contractor until he receives the RCT 47.
With effect from 6 October 1999, it will no longer be necessary for a sub-contractor to produce his C2 in person where:
- the sub-contractor has notified his tax office of the details of the bank account into which payments in respect of the contract are to be paid and
- the principal undertakes to make all payments due to the sub-contractor into the nominated account.
In the case of a sub-contractor resident in the State the bank account must be held in the State. In the case of a non-resident sub-contractor the nominated bank account may be held either in this State or in the State in which the sub-contractor is resident.
Where the above conditions have been complied with the sub-contractor need only provide details of the C2 and the nominated bank account to the principal contractor on form RCT 46 to enable the principal to apply for a RCT 47.
Forms RCT46 and 47 have been re-designed. The new forms include spaces for the sub-contractor’s bank account details and for the principal contractor to undertake to make all payments directly into that nominated bank account.. The re-designed RCT 46 form may be used by a subcontractor to give details of the nominated bank account to the tax office as part of the application for a RCT 47.
Sub-contractors wanting to operate the bank account payments system should confirm with the principal contractor that he/she is in a position to make payments into the nominated bank account before completing the bank account details on the RCT 46.
If you are a sub-contractor and you wish to avail of the nominated bank account system you must:
- Confirm that your principal contractor is in a position to and is willing to make payments into the nominated bank account.
- Get a supply of the new Form RCT 46 from your tax office,
- Complete the parts of the Form RCT 46 which are relevant to you and send it to your principal contractor. The principal will complete the remainder and submit it to the tax office in the normal way
Further information or clarification may be obtained by contacting your local Tax Office.