How does RCT work for a subcontractor?
An overview of how RCT works and the forms that are involved
Subcontractor or employee?
When you take on work in the construction, forestry or meat processing industries, you should ensure that you have been correctly classified as an employee or a self-employed subcontractor.
Determining the correct employment status of a worker
Subcontractors Checklist (MS Word, 25KB)
Are you aware that...
- Any tax deducted from payments made by the Principal to you will be available for credit against your tax and PRSI but you must still make a return of your income to the Revenue Commissioners. Any credit for tax deducted may be affected by the general 4-year time limit for repayments - further details are provided in eBrief No. 31/2008.
- A partnership that does not hold a C2 is deemed to be a gang. Information on payments to a gang or group of subcontractors. (MS Word 19KB)
- If you should have registered for VAT but failed to do so, you will be liable to pay any VAT due together with interest and penalties as appropriate.
- Following the introduction of the VAT Reverse Charge on 1 September 2008, resident subcontractors providing construction services (that are subject to RCT) to principal contractors will still be required to register for VAT, subject to the normal VAT rules. However, these subcontractors will no longer be obliged to charge and account for VAT on construction services (except haulage for hire) supplied to principal contractors.
- From 1 September 2008, non-resident subcontractors who provide construction services to principal contractors that are
within the scope of RCT (as defined in Section 530 of the Taxes Consolidation Act, 1997 but excluding haulage for hire), are
not required to register for VAT. Such subcontractors may however register for VAT, in order to claim credit for input VAT
incurred.
Further information for subcontractors (PDF, 33KB). - Where the VAT Reverse Charge applies, principal contractors must account for the VAT as if they had supplied the service.
- The VAT Reverse Charge does not impact on the VAT obligations of resident and non-resident subcontractors performing relevant operations in the meat processing or forestry industries or those involved in haulage for hire within the construction industry – these subcontractors will continue to be obliged to register for, charge and account for VAT, subject to the normal VAT rules.
- Further information on the VAT Reverse Charge. Subcontractors are advised to consult the Revenue VAT Guide (PDF, 1.2MB or
visit the VAT Section of the Revenue website to ascertain their VAT obligations.
