RCTDC Form -what to do with it?

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

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.

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.

simplyjoe said:

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.

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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.

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?

ney001 said:

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?

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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.