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RCTDC Tax Deduction Cert

  • 27-11-2005 11:56pm
    #1
    serotonin_sam
    Closed Accounts Posts: 204 ✭✭


    I have taken on some extra work (3 days/week) with a builder - as an aside from my PAYE job.
    He suggested he would pay me, deduct tax but not have me on the books as a PAYE employee. Instead, he will give me a RCTDC Relevant Contracts Tax Deduction Certificate - which I can submit to the tax office to claim a repayment of taxes paid.

    My question is can I expect to get much back considering I have gone above the tax cutoff for the year in my PAYE job due to working a lot of overtime earlier in the year - and im now on 40% tax on most of my earnings?

    He was suggesting that I would get the most of it back but I have my doubts about this.

    Have any of you been paid on this basis?


Comments

  • #2
    fintan
    Closed Accounts Posts: 647 ✭✭✭fintan


    He will deduct 35% tax on any payments he gives you.

    If your PAYE job + the new push your earning into the higher tax bracket then as part of a tax return you will have to pay the difference between 48% and 35% on anything you earn from the builder.

    BUT you can deduct expenses such as tools, work clothing, travel etc which could mean you either don't pay any extra tax or get a refund.

    You do need an accountant, so you have to decide if the cost of an accountant and filing returns is worth it?


  • #3
    serotonin_sam
    Closed Accounts Posts: 204 ✭✭serotonin_sam


    Thanks for the clarification Fintan.

    This was pitched to me as something that I now realise its not - and at the time I took his cheque and signed the bloody form.

    I am going to sort this out with him but in the event that the Tax Deduction Cert(TDC) was sent in to the revenue (it was for a small amount - €760), am I going to be in any sort of bother if i dont file tax returns even if i dont sign any more of these TDC forms?

    Furthermore, I realise now that by signing that form, I declared myself as a subcontractor - so i'm wondering if i'm supposed to have a C2 cert and could get in bother over that?
    <EDIT> I just checked this out on revenue.ie and it looks like i have no problem as regards the C2
    "1.3 RCT is a system of tax deduction where principal contractors deduct tax at 35% from payments to sub-contractors who do not have a certificate of authorisation (C2), and for whom they have not received a relevant payments card (C47)".</EDIT>
    I never gave my pps # - would the form be invalid without it?


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