You have agreed a contract with a contractor and have a written quotation/contract.

See the list below to determine if it is covered by Relevant Contracts Tax (RCT). If RCT is not relevant the contractor is paid in the normal manner. However, if any of these terms and conditions apply, Revenue will probably require you to retain a % of the contract fee, to ensure future taxes are paid.

IMPORTANT NOTE:

1.     RCT does not apply to professionals such as architects, surveyors etc.
2.     Schools are not entitled to reclaim the VAT on goods or services
3.     All transactions with Revenue must be conducted electronically through Revenue Online Services (ROS)

 

Relevant Contracts Tax (RCT)

Overview
RCT is a withholding tax that applies to certain payments by principal contractors to subcontractors in the construction industry. The rates of tax are 0%, 20% and 35%. All RCT transactions must be submitted through ROS.

Who is a principal contractor?
The Board of Management of a School is a Principal Contractor. Principal contractors must register with Revenue and all transactions with Revenue must be made electronically through Revenue Online Service (ROS).

Construction Activities Covered by RCT include:

  • Constructing
  • Cleaning buildings internally and externally during their construction
  • Works which are an essential part of other construction work
  • Transporting someone else’s materials or machinery for use in any of the activities listed above (known as haulage for hire)

Construction activities under RCT include:

  • constructing, altering, repairing, extending or demolishing:
    • buildings or structures
    • works that are part of the land
  • installing, altering or repairing:
    • security systems
    • lighting systems
    • heating systems
    • air conditioning systems
    • soundproofing systems
    • ventilation systems
    • power supply systems
    • drainage systems
    • sanitation systems
    • water supply systems
    • telecommunications systems
  • cleaning buildings internally and externally in the course of their construction, alteration or repair (not including normal maintenance)
  • works which are an essential part of, are in preparation for or are completing other construction work. This includes:
    • site-clearing
    • earth-moving
    • excavating
    • tunnelling
    • boring
    • laying foundations
    • erecting scaffolding
    • site restoration
    • landscaping
    • providing roadways and other access works
  • works that form an essential part of, are in preparation for or complete works such as drilling for minerals, oil, natural gas or other natural resources
  • transporting someone else’s materials or machinery for use in any of the activities listed above (known as haulage for hire)

 

Step by Step

Four steps to RCT compliance

  1. Notify ROS of all relevant contracts
  2. Notify ROS of payment details
  3. Submit a deduction summary, which is a monthly or quarterly return
  4. Pay ROS the RCT deducted from payments made to subcontractors

Step 1

Notify ROS of all relevant contracts

Begin by ensuring you have all the details of contractor and contract – RCT Checklist should be printed and retained for your records.

You are now ready to log-on to ROS.

Log-on to ROS select the MyServices tab and scroll down to Relevant Contracts Tax options and select Principal contractors option.

On the next screen select ‘RCT Contract notifications, then select ‘Notify a Contract’.

Over the next two screens you will

  • Input the contract details
  • Tick the box to declare the contract is not a contract of employment
  • Fill in contractors and contract details
  • Tick the box to declare the contract is not a labour only contract
  • Select ‘continue’

Once you are on ‘Sign and Submit’ page type in your password and click ‘sign and submit’

If you do not enter your password you have not completed the registration and nothing will be sent to Revenue.

You will receive an acknowledgment number to your ROS inbox. Print and keep for your own records.

IMPORTANT NOTE: Do not pay the contractor without first notifying Revenue. 

 

Step 2

Notify ROS of payment details
When you are ready to pay the contractor notify Revenue through Revenue Online Service (ROS)
If you have not already notified ROS of the contract do so now.

IMPORTANT NOTE: Do not pay the contractor without first notifying Revenue. 

 

Logon to ROS and from MyServices tab and scroll down to RCT link, Principal contractors options.
  • Next; select ‘Input Payment Notification’
  • Highlight the contract you want to pay and select ‘Input Payment Notification’
  • Fill in Gross Payment amount
  • Tab to next box and the net amount and deduction will automatically fill
  • Select continue until you get to ‘Sign and Submit’
  • You must enter your password and click on ‘Sign and Submit’
  • If you do not complete this step no details will be sent to Revenue
  • Check your ROS inbox for Revenue notification. This is your ‘Deduction Authorisation’ This will show the amount you must withhold from the contractor. Print and file for your records. Also give a copy of the Deduction Authorisation to the contractor

IMPORTANT NOTE: Before 23 of each month Logon to ROS to check the deduction summary and pay RCT to ROS.

 

Step 3

Submit a Deduction Summary, which is a monthly or quarterly return.

IMPORTANT NOTE: You can amend a payment notification up until 23 of the month. Later than this and €100 surcharge (penalty) will be charged.

  • At the end of the period Revenue will provide you with a Deduction Summary through ROS
  • On or before 23 of the month. Logon to ROS, check to see summary matches your records
  • If no amendment is necessary the Deduction Summary is deemed to be the return on the return filing date. Arrange the payment on or before the due date
  • If the return requires amendment you can amend it, file the return and arrange for payment on for before the due date
  • Print the Deduction Summary for your records

 

Step 4

Pay ROS the RCT deducted from payments made to subcontractors.

  • Pay RCT by 23 of the month following payment to subcontractor
  • Use Single Direct Debit facility on ROS

 

IMPORTANT NOTE: Payment dates for RCT and VAT

RCT is paid monthly or quarterly as determined by Revenue.

RCT Quarterly payments are made on or before;

  • 23 October for July – September
  • 23 January for Oct – Dec
  • 23 April for Jan – Mar
  • 23 July for Apr – June
  • RCT monthly payments are made on or before 23 of month for previous month e.g. payment on 23 September is for August
  • VAT Payments are due
  • 23 March for Jan/Feb
  • 23 April for Mar/April
  • 23 July for May/June
  • 23 September for July/Aug
  • 23 November for Sept/Oct
  • 23 January for Nov/Dec

 

If you need any further information please email primary@fssu.ie or phone (01) 9104020.