You will find information on Revenue’s website and on the RCT/VAT section on the FSSU website. The FSSU has an information video for schools providing an overview of RCT and Reverse charge VAT, focusing on when it applies and how to process it on ROS. See our video.
For the purposes of RCT, construction operations include:
- Construction, alteration, repair, extension or demolition of buildings or structures
- Refurbishment or fit out projects
- Typical building trade services supplied with the construction sector such as electricians, plumbers, bricklayers, plasterers, carpenters, glaziers, labourers, painters, etc.
- Preparation for the operations above e.g. site clearance, laying of foundations, putting up of scaffolds
- Installation of systems such as alarms, air-conditioning, lighting, heating, sound proofing, ventilation, power supply, drainage, sanitation, water supply, fire protection or telecommunications
- External or internal cleaning of buildings during their construction, alteration or repair (excluding general maintenance)
- Hiring of plant and machinery for all above
- Operation and maintenance contracts which include repairs
- Crane hire with operator
- Scaffolding hire with erection services
- Any operations necessary to rendering complete the development work
It is important to note that professional fees relating to construction works (e.g. architects, quantity surveyors etc.) are not within the scope of RCT and where any part of a contract is for relevant operations then the contract as a whole is a relevant contract and all payments under that contract are liable for RCT
Detailed information on construction operations are available in Revenue’s Tax and Duty Manual (Tax and Duty Manual).
- Where a new building is under construction or an existing building is being refurbished, all the activities necessary to render the building complete would be considered to be construction operations
- In general, all construction operations that form part of ‘rendering a building complete’ are subject to RCT. This is why the likes of cleaning, laying carpets, plastering, painting, fitting, tiling, kitchens and bathrooms all fall under the RCT rules when they form part of a contract to build or renovate a building.
- Notify Revenue of all contracts with subcontractors online
- Notify payments online-before making the payments
- Receive deduction authorisation from Revenue in relation to that payment, indicating which rate (0%, 20% or 25%) of RCT to apply (which broadly will depend on the subcontractor’s tax compliance position). This is again prior to making the payment.
- Provide a copy or details of the Deduction Authorisation to the Subcontractor
- Submit monthly/quarterly returns online
- Make payments to Revenue of RCT deducted
If contract provides repair and maintenance then reverse charge should apply to any services carried out under that contract.
If contract provides that a separate charge should apply where repairs are necessary, then only the repairs element is subject to reverse charge – school charges itself the VAT @ 13.5%.
Supply and installation of fittings are not services within the scope of the reverse charge– separate invoice should be issued charging VAT at 23% for this element of the contract
The reverse charge will not apply to a supply of goods where that supply is not part of a construction service that is subject to RCT.
Yes, all schools must register for VAT as they must operate RCT on construction services. Schools may not claim VAT on purchases but must use the VAT reverse charge.
If you are already registered on ROS for PAYE/PRSI ER, you can add a new registration using Manage Registration under the Services tab. If not, you can complete the TR1 form which is available to download HERE.
How do I fill out the paper TR1 form?
Under the circumstances described above, the only VAT schools need to return is Reverse Charge VAT on construction operations. This VAT should be included in the “T1 box VAT on Sales”. The “E2 box Total goods from other EU countries” should be zero, as there is no requirement to account for VAT on goods purchased from the EU.
You should continue to file Nil returns, where there is no VAT liability.
*Northern Ireland continues to be subject to the same EU VAT rules on goods as other EU member states.
Yes, select Supplementary or Amended option.
If you need to pay more VAT i.e you haven’t paid enough, use the Supplementary Return – the original return plus the supplementary return must add up to the total liability due.
If you need to replace the original return i.e you may have paid too much, use the Amended Return – this replaces the original return made.
Click here for illustrated steps on how to amend a VAT return
Yes, you can amend an RTD:
Log into ROS.
Choose ‘Complete a form online’ again and choose ‘VAT’ and ‘RTD’, then choose the period you wish to amend.
Input the correct amounts and continue to sign and submit.
You will notice in your revenue records that the previous RTD has been replace by the updated amounts.
Where Schools registered for VAT solely for the purposes of reverse charge construction services – schools should pay the Invoice including the VAT on the purchase of Goods and services from the EU and Northern Ireland. Schools should not provide their VAT number.
Goods imported into the State from outside the European Union (Excluding Northern Ireland) are subject to VAT at the point of entry. Schools should not apply for an EORI number. Schools will be required to pay VAT and Duty on UK imports. This money will be collected by the supplier or haulier.
Schools registered for VAT solely for the purposes of reverse charge construction services are not obliged to self-account for VAT on services received from outside the State. The school should pay the invoice including the VAT to the supplier.
Treat the subcontractor as if they were resident – same RCT rules apply.
Check if they are registered for Irish VAT.
Include their tax registration number on the contract notification but if the number is not valid or they do not have a registration number click the ‘tax reference number not available’ box and provide details of the subcontractor. They can claim back any tax deducted using the forms below.
Form IC1 Individual Subcontractor
Form IC3 Company Subcontractor
For further information contact Revenue Tel.: +353 1 738 3680 E-mail: intclaims@revenue.ie
Do not pay any VAT if charged and self-account for VAT @ 13.5% as normal.
RCT/VAT payments are recorded to the same expense code used to record the payment to the contractor
For example, if the payment to the contractor is posted to Minor Works expense, then the RCT/VAT payment is posted to 5315 Minor Works Grant expense.
Similarly, if the construction payment relates to Emergency works or Summer Works Schemes, then the RCT/VAT is posted to 3940 Capital Building Grant Expense.