- Compulsory electronic communication: From 1st January 2012, RCT principal contractors (School Boards of Management) are obliged to interact with Revenue electronically (for RCT purposes) so all School Boards of Management should be registered for the Revenue On-line Service (ROS). School Boards of Management not currently registered should do so as soon as possible. If assistance is required, School Boards of Management should contact the ROS Helpdesk at 1890 201 106 or email email@example.com. School Boards of Management engaging a tax advisor/agent/bookkeeper to prepare their RCT returns should ensure that their tax advisor/agent/bookkeeper is registered for ROS.
- Notifying a relevant contract to Revenue: When a principal (School Boards of Management) enters into a relevant contract with a subcontractor, he/she will be obliged to provide Revenue with details of the contract online, including a declaration that the contract being entered into is not a contract of employment. This process is known as “Contract Notification” in the new system. Revenue will acknowledge the contract notification and advise the principal (School Boards of Management) of the current rate of RCT applicable to the subcontractor.
- Notifying a relevant payment to Revenue: Immediately before making a payment under a contract, the principal (School Boards of Management) should notify Revenue (through ROS) of his or her intention to make the payment and state the gross amount to be paid. This process is known as “Payment Notification” in the new system. Confirmation of the RCT rate to apply to the payment: Upon receipt of the payment notification, Revenue will issue an acknowledgement to the principal’s (School Boards of Management) ROS inbox. This acknowledgement will include the “Deduction Authorisation“, which will specify the rate of tax (RCT) and the amount of tax to be deducted from the payment. A copy or details of the Deduction Authorisation should be given to the subcontractor (where tax has been deducted
- Filing the periodic return and making the payment of RCT deducted: A pre-populated “Deduction Summary” (DS) will be available on ROS shortly after the end of the return period (via the “Online Return” link on the “My Services” page). The principal (School Boards of Management) should check the DS to ensure the information is correct and make any amendments required prior to filing the return. The principal (School Boards of Management) should arrange for payment of the RCT deducted on or before the due date.
a. Information on the revised procedures for Tax Clearance in relation to Public Service contracts is available on . The current arrangements in relation to Tax Clearance Procedures for Public Service Contracts, Grants, Subsidies and similar type payments are being revised.
Before entering into a relevant contract with a subcontractor, you are obliged to satisfy yourself that the proposed contract is NOT a contract of employment. You are also required to satisfy yourself as to the identity of the subcontractor.
Once the above requirements have been met, you are obliged to provide Revenue with details of the subcontractor (name and tax reference number) and contract (location, start/end dates, estimated contract value, etc) through ROS. You should provide the “official” name of the subcontractor – this is the name that is recorded on Revenue’s record. The subcontractor’s “official” name would be included in correspondence or other documentation (e.g. a relevant payments card) received from Revenue concerning the subcontractor. This process is known as “Contract Notification“.
Revenue has provided guidance on how to notify a contract (PDF,118 KB), what information is required (PDF, 91KB) from the principal (School Boards of Management) and how to ascertain whether it is a labour only contract (PDF,17 KB). In addition, instructional videos are available on the Contract Notification page.
Yes, all contracts should be notified to Revenue. There are no exceptions. From 2012 onwards, the paper Form RCT 1 is no longer required to be completed by School Boards of Management and subcontractors. As a result, Notices of Exclusion from the RCT 1 process are no longer valid.
If you have no tax reference number for the subcontractor when you notify the contract, you will be asked to provide additional details for the subcontractor (name, address, phone number, date of birth, etc) so that Revenue can contact the subcontractor directly. You will also be obliged to advise the unknown subcontractor in writing within seven days of notifying the contract or before you pay the subcontractor (whichever is earlier) that:
- Revenue were unable to verify the subcontractor’s identity
- RCT at 35% will apply to payments to the subcontractor
- The subcontractor should contact Revenue with a view to clarifying his/her identity
If the VAT Reverse Charge applies to the payments on the contract, then the VAT exclusive amount should be input as part of the Contract Notification (i.e. you do not include VAT in the payment to the subcontractor). However if the VAT Reverse Charge does not apply (e.g. haulage, meat processing or forestry operations) then the VAT inclusive amount should be input.
Yes. You will be required to notify each contract separately in the new system unless they are considered to be part of an ongoing contract with the subcontractor (see next question). Each contract will be given a unique contract reference number and payment notifications should be made to Revenue under the relevant contract reference number.
Yes. In the new system a principal (School Boards of Management) will not be authorised to deduct tax from a payment until he/she has notified Revenue of the payment and received authorisation to make the deduction. Failure to properly notify Revenue will leave the principal (School Boards of Management) liable for the RCT.
Immediately before making a payment to a subcontractor you should advise Revenue online of the amount of the gross payment to be made. This process is known as “Payment Notification“. You should select the subcontractor from the list of contracts you have already notified to Revenue. You will not be able to complete a Payment Notification on a contract unless the contract has already been notified to Revenue.
Revenue will issue an acknowledgement to you in response to the Payment Notification. This acknowledgement will include the “Deduction Authorisation” which will set out the gross amount, net amount, the rate of tax (RCT) and the amount of tax to be deducted from the payment. This Deduction Authorisation (DA) relates specifically to the payment notified. You should provide a copy or details of the DA to the subcontractor (where tax has been deducted). You can provide a copy of the DA in writing or in electronic format.
You should provide the following to the subcontractor (in writing or in electronic format):
- Name and tax reference number of the principal (School Boards of Management)
- Name and tax reference number of the subcontractor
- Gross amount of the payment including the amount of any RCT deducted
- Amount of the RCT deducted
- Rate at which RCT was deducted
- Date of the payment
- Unique ID number issued by Revenue on the related Deduction Authorisation
The pre-populated Deduction Summary is created by Revenue based on the payment notifications made by the principal (School Boards of Management) during the period covered by the return. It will be available on ROS shortly after the end of the return period, which can be monthly or quarterly (depends on the filing frequency of the principal (School Boards of Management).
Guidance on accessing the Deduction Summary (DS) (PDF, 81 KB) is available on the website. To view the DS, go to the “My Services” page on ROS and:
- Click Online Return
- Select Tax Type: RCT and Return Type: RCT Return
- Click next
- Select the period (e.g. 01/02/2012 – 29/02/2012 for monthly filers) and click next
You should check the Deduction Summary (DS) to ensure that all payments made to subcontractors have been notified to Revenue and that the amounts notified were correct. Guidance on checking and amending the Deduction Summary (PDF, 33 KB) is available on the website.
If the DS is correct, you do not have to file (submit) the return – it will be deemed by Revenue to have been filed on the due date. If the DS is not correct, you should make the necessary amendments online and file (submit) the return by the due date. Whether the return is filed by you or deemed filed, you should arrange for payment of the RCT deducted on or before the due date.
School Boards of Management required under the Mandatory eFiling Regulations to file returns and make payments electronically, have until 23rd day following the end of the return period to pay and file. School Boards of Management who decide to pay their RCT manually (e.g. by cheque) must pay and file their return by 14th day following the end of the return period.
If you file the return you will receive an acknowledgement from Revenue (in your ROS inbox). However, if you choose not to file your return (Revenue deems the return to have been filed), you will not receive an acknowledgement in your ROS inbox.
No, you cannot amend line items (payment details) on the return, once it has been filed or deemed filed. You can only add unreported payments to the return. Where amendments need to be made to line items after the return has been filed or deemed filed (if not filed by the due date), you should contact your local Revenue District (PDF, 25 KB). A surcharge of €100 will also apply to any amendments made after the due date for the return, and you may also be liable for interest and penalties. Guidance on checking and amending the Deduction Summary (PDF, 33 KB) is available on the website.
If you have a query about the new system that is not addressed in these FAQs, please email us at :eRCTInfo@revenue.ie
For further information on the new RCT system please see: Electronic RCT System