When you are the subcontractor
Revenue sets your rate at 0%, 20% or 35%. A principal contractor deducts RCT at that rate from the whole of each payment to you. The principal notifies the payment in ROS and gives you a deduction authorisation.
On an invoice to a customer whose type is Principal contractor, Record a payment offers Tax withheld at source and a Rate, unless the job’s kind of work has Construction work unticked. The deduction is saved as its own payment, with no money arriving.
- Your Deduction rate and Return period are in the Tax settings.
- When you are registered for VAT and your rate is above 0%, an invoice to that customer shows what to Expect: the cash, and the RCT credit at that rate.
- An invoice whose balance is no more than that credit is not late and is not chased. It is listed under Awaiting RCT credit.
Invoices to a principal contractor
A customer whose type is Principal contractor always has a VAT number on file. When you are registered for VAT, your invoice to that customer for work in Ireland prints the number beside the sentence “VAT on this supply to be accounted for by the Principal Contractor.”
The invoice shows the net amount only, with no VAT rate, no VAT amount and nothing about RCT. The two-thirds rule does not apply, and 13.5% is never charged in place of the reverse charge.
A job whose kind of work has Construction work unticked, such as a survey or a window clean, is outside RCT in the office. Its invoice charges VAT as usual, and Tax withheld at source is not offered on it.
Every deduction, by return period
Withheld at source lists what principals kept back, one return period at a time. Each period shows the total, each principal and each payment, with Download CSV for your accountant.
You add a principal’s own figure for the period from their deduction authorisations. It shows under Their figure, beside yours, with any difference.
When you are the principal contractor
Deducting RCT is on the bigger plans, with RCT role set to Contractor or Both. Each supplier you pay as a subcontractor has the rate Revenue gave them. Their bills are reverse charged unless Reverse charge is unticked. A reverse-charged bill carries no VAT. You account for the VAT on it instead.
When you pay a subcontractor’s bill, the dialog says “Notify this payment in ROS first.” You type Revenue's deduction and the Authorisation number. The office’s own figure at the subcontractor’s rate is shown beside the deduction as a check, with any difference.
What you deducted is totalled by return period, with a CSV to check against your ROS deduction summary. When you file in ROS, the return and payment for a period are due by the 23rd of the month after it ends.
