principal contractor

P

peter1234

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I'm subcontractor taking the job from (A) principal contractor. I'm payd with c45 and I have been registered as (B) principal contractor for the same job to pay the c45 to my (C) subcontractor!
for example:
Job done with C45: Gross-- 2000 Tax 35%--700 Net ---1300
A pays to B: Net 1300
B pays to C: Net 750
B gives to C C45 : Gross ---1000 Tax 35%---350 Net ---750

what Bshould put in RCT30 for this period?
 
Firstly the Form C45 no longer exists. You should be using a RCTDC to give to your unregistered subcontractors with their net payments.

As a principal contractor you only record details of tax that you withhold on the form RCT30. Therefore you declare and pay over to the Revenue the €350 tax that you have withheld from C with the RCT30.

If you do not hold a C2, you will be receiving €1,300 from A and you have to pay €650 to B and €350 to the Revenue.

Can you not get a C2? This would increase your cashflow position.

You will of course get a credit of the €700 withheld from you by A when you prepare your accounts and submit your tax return.
 
Domo said:
You will of course get a credit of the €700 withheld from you by A when you prepare your accounts and submit your tax return.
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Can the OP not also use the RCTDC credit to pay any other taxes ( including RCT) payable by them ? That would ease cashflow also.
 
Unfortunately not.

An analogy that could help would be:

The RCT that is withheld by A could be looked at like the PAYE and employee pays on his salary. If the employee also hires and pays employees (say he is self employed also), he has to deduct and pay over PAYE for the employees - it can't be set off (like the RCT he has to withhold from payment to C).

Does that help with the logic?

He should apply for a C2 to receive his own payments gross. The main reason why someone will not get a C2 when applying is that their tax affiars may not be up to date.
 
Domo

Not sure if I agree with your logic there. The RCT is effectively a withholding tax until the client gets their tax affairs up to date. If for example Peter had an outstanding VAT/PAYE/RCT liability I don't see Revenue having any problem allocating this €700 against any of these taxes.

In your analogy you have compared RCT with PAYE but in my opinion these are not comparable as PAYE will not be refundable unless overpaid.
The €700 is a credit to Peter receivable from Revenue and the €350 is a Revenue expense. If PAYE was been operated no such credit would be available.

In any case I do agree with you that Peter should get a C2 and receive payments gross.
 
I have in the past had RCT deducted on RCTDC allowed against Income Tax due or VAT due by clients. I can't see why Revenue would not also allow RCT paid be used against RCT due? Certainly one cannot set off PAYE but if a sub-contractor has an RCTDC for say €700 tax value and owes €700 for PAYE/PRSI for his employees then the RCTDC can be used to discharge that PAYE/PRSI bill. You don't try and set it off on the RCT30 itself obviously as that would not be correct, but file the full amount and then send in the RCTDC separately asking for credit against whatever tax is outstanding.
 
I was just trying to give an analogy - OK it was a bad one.

Yes, if the Revenue agree that you have overpaid RCT, this can be set against the RCT liability of the RCT30, as with other taxes.

However, if you delay payment, and the Revenue do not agree that you have overpaid, and there is no refund available for set off, they will charge interest on late payment for the amount due on the RCT30.

Best place to get confirmation of the position is with your local RCT office - I find them very helpful.
 
Yes, that's correct, on RCT i have put 350 and asked the revenue to take this amount from RCTDC credit (700).
I have received the statment with following:
debit credit
RCT 30 liability -----350
RCTDC ---------------- 700
Repayment---------350
Total--------------1050 1050
Balance -----------0.0 0.0
What this means? The RCT30 was added to Total relevant tax!
I coudn't get C2, to be registered a need to present a "copy of lease in respect of your business premises".I don't have such copy
Thanks!
 
The 1050 doesn't mean anything in money terms. They are just totals to show the total of the debit side equals the credit side and everything is balanced - the balancing figure being the refund that they are sending out to you.
They gave you credit for the 700 deduction suffered by you, they set off the 350 you owe them that you deducted from your subbie and they are paying you the balance.
 
peter1234 said:
I coudn't get C2, to be registered a need to present a "copy of lease in respect of your business premises".I don't have such copy
Thanks!
Click to expand...

The problem with C2 applications is Revenue are assessing you for credit. Think of a C2 as a credit card. Revenue allow you to receive payments gross then pay them at the end of the year on your tax returns. A person with no substantive ties like house/mortgage/lease may sometimes be viewed less favourably. That being said, if one has a genuine sub-contractor status with a strong tax history here you could ask again if they would re-consider, especially once you have had a period of filing on the RCTDC system. Is there a genuine reason why a lease cannot be produced. Can you supply them with some evidence otherwise to give them "comfort" .
 
I don't know what this means: "copy of lease of your business premises", I'm renting apartment, I don't know what to present them instead of this copy!
 
peter1234 said:
I don't know what this means: "copy of lease of your business premises", I'm renting apartment, I don't know what to present them instead of this copy!
Click to expand...

If you are running your sub-contractor self-employment from a rented apartment then say so. That is your only address. Revenue have many similar situations. Have you told them this and been refused or did you not send in application due to being unsure about this heading. ?
 
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