Month: May 2019

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Relevant Contracts Tax (RCT)

What is RCT?

RCT is withholding tax applied to certain payments made by principal contractors to subcontractors in the construction, forestry and meat – processing industries.

Rates of tax range from 0%, 20% and 35% depending on the subcontractor’s tax status with Revenue. All RCT filing and payments are submitted and processed online using ROS (Revenue Online System)

Who is a principal contractor?

A principal contractor uses a subcontractor to carry out work on behalf of your business in construction, meat processing or forestry.

Revenue also provides the following list of other principal contractors, if they;

Subcontractor or Employee?

The principal contractor must decide which category a worker falls into. Penalties apply for incorrectly registering someone as a contractor instead of an employee.

Checklists are available on www.revenue.ie

The Process

All principal contractors must ensure they are registered to use ROS and subcontractors should also register to access details regarding their RCT.

The principal contractor must notify ROS of the following;

  • All relevant contracts
  • Payment details
  • Pay RCT deducted from payments made to subcontractors

Also, the principal contractor must advise the subcontractor of the tax that will be deducted.

Once the contract is set up, a Site Identifier Number (SIN) is issued for the site or project and will be stated on all relevant documentation. This SIN must be used for all contracts relating to it.

Deduction Summary

Revenue will issue a deduction summary (monthly or quarterly) based on the payment notifications and confirm the total RCT to be paid by 23rd of the following month.

Penalties

If a principal contractor submits a payment that differs to RCT details, Revenue will treat this as an unreported payment which is liable for penalties.

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Revenue 2018 Annual Report

Revenue issued their 2018 Annual Report on 09th May confirming Revenue collected net Exchequer receipts of €54.6 billion last year.

Chairman, Niall Cody stated that;

‘when compared to 2017, net Exchequer receipts increased by €4 billion. There were increased receipts for almost all taxes and duties including Income Tax, up 6.6%, VAT up 7% and Corporation Tax up 26.7%.’

Mr Cody acknowledged taxpayers’ engagement, and that of tax practitioners and agents, in achieving the very strong compliance rates seen again for 2018. 9,000 businesses and individuals had phased payment arrangements in place by the end of 2018 covering €93 million in debt. For taxpayers that refuse to pay their tax or liase with Revenue, Niall Cody explained that;

‘we undertake a range of debt collection and enforcement actions to collect tax debt. In 2018, we collected €211.6 million as part of our debt collections and enforcement actions.’

Mr Cody also went on to say;

‘it is very important that we support compliant taxpayers by identifying risks and tackling non-compliance in all its forms. We continue to be alert to, and pro-actively respond to, the risks arising from the changes in economic and business environments both nationally and globally.’

The new arrangements for PAYE reporting with PAYE Modernisation came into force on 01st January 2019. Revenue received 1.4 million payroll submissions as of 31st March 2019 from almost 157,000 employers for more tan 2.6 million employees and pension recipients totalling almost €24 billion.

Mr Cody added;

‘with real-time reporting now in place for employers, we have turned our focus to the benefits of this new system for employees. From 15 May, all employees will be able to view their payroll details, as reported by their employer, through myAccount. Further improved services through myAccount will follow later in the year.’

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Extension of Pay & File Deadline for Self-Assessed

Revenue have confirmed they have extended the Pay & File Deadline to Tuesday 12th November for all self-assessed individuals. In order to qualify for this extension, you must pay and file through ROS.

The individual must;

  • Pay Preliminary Tax due for 2019
  • Pay Income Tax Balance for 2018

This extension also applies for beneficiaries who have received gifts and inheritances with valuation dates in the year ended 31st August 2019. The Capital Acquisition return and payment must be paid through ROS to qualify.

As with every year, as it is an extremely busy period, we would advise all our clients that in order to give enough time to review your tax year and to submit it, paperwork must be submitted as soon as possible for 2018

Have a query? Contact us on 01 539 7999

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