RCTDC Form -what to do with it?

[ney001]

Hi guys

OH was an employee of construction company but recently changed jobs and new employed has now given him a RCTDC form which he says OH has to submit to revenue to get tax back. Can someone explain this to me?

[1] Do we just post in to tax office?
[2] Do we need an accountant?
[3] Does this mean that OH has to pay his own tax at the end of the year?
[4] Is there anything else we have to do.

Thanks in advance - have no idea how all of this works

 

[Graham_07]

Ok, a consult with an accountant would explain this better and in more detail but in brief :-

1) The RCTDC is provided by a principal contractor to a "non-C2 holding" sub-contractor. Tax at 35% is deducted from the sub-contractors payment and remitted by the principal contractor to Revenue.
2) The sub-contractor may apply to Revenue for refund of some-all of the tax depending on their tax affair situation. Alternatively they may wish to have Revenue hold it against their year end tax/PRSI bill.
3) The sub-contractor is self-employed and must account for their own taxes so registration with Revenue on form TR1 is necessary. This may, depending on the level of income also bring the sub-contractor into VAT
4) The sub-contractor, if in a continuing contract , may apply for a C2 in which case the principal contractor no longer has to deduct the tax. To do this the sub-contractor needs a contract with a principal contractor ( a letter from the principal with the C2 application is usually needed) and 3 year clear tax history ( being on PAYE would satisfy this )

As said at start, if this is going to be ongoing, I'd recommend you talk with an accountant.

 

[simplyjoe]

As regards point 4 above most tax offices also insist on the subcontractor supplying their own materials, tools and also to have their own PL insurance before granting a C2.

 

[Graham_07]

As regards point 4 above most tax offices also insist on the subcontractor supplying their own materials, tools and also to have their own PL insurance before granting a C2.

Correct, omitted that, sorry. A "labour only" sub-contractor is unlikely to be issued with a C2 as Revenue do not consider that to be a bona fide sub-contract. In the past there has been a lot of Revenue and Social Welfare comment on such jobs as being employees not sub-contractors.

 

[ney001]

Thanks guys - I will organise accountant asap. - After initial consult will we be able to submit certs ourselves or do we need accountant to do this every time for us?

 

[Graham_07]

Thanks guys - I will organise accountant asap. - After initial consult will we be able to submit certs ourselves or do we need accountant to do this every time for us?

You can do it yourself once set up, just keep copies for end of year to make sure all credited correctly. Some people stay on RCTDC's as it's a handy way of saving for tax and can result in a refund at year end once returns filed if the RCT deducted exceeds the liability.