RCT (registerd contractors tax)

galwaydude18

Hi I am in the process of registering with the tax off to become self employed as a sub contractor.. I will be going on the back to work enterprise scheme with the social welfare..

The information I am wondering is what kind of expenses can I claim being registered for the RCT? Can I claim expenses such as diesell, food, workwear, tools, food (i.e. lunch), tax and insurance for the van etc.?? If so what is the correct procedure for doing that as I am unable to get an answer from anyone in the tax office..

Thanks in advance for any answers and help..

Odats

RCT is relevant contracts tax and is deducted by a principal contractor from a subcontractor who does not have a C2/Payments card. RCT is deducted @35% of the gross payment. You cannot claim diesel etc that is against your income tax when you do your tax return and claim the VAT back in your VAT return. Unless you are taking on other subbies to do jobs for you you don't need to worry about deducting of RCT and the admin that goes with it getting payments cards etc.

galwaydude18

Ya the guy that would be taking me on a sub contractor will be deducting 35% off me. I understand that. The thing I cant understand is the diesel I will be using in my van. Can I make a claim for any of that? Say for example I used 100euro worth of disel for work purposes during the week can I claim back any of that at all ??? Sorry I should mention that I am not registering for VAT...

soontobesmokin

Why not claim for deisel ? As far as I'm aware you can claim for this.
I was involved for a few years working with the rct system and my accountant deducted the expense of deisel in the running of my business plus claimed the vat back on it, when I was registered for vat. I am of course open to correction.

Kingkong

Getting ahead of yourself here. Forget about RCT for a moment. First of all you will be self employed and will be obliged to file a tax return in which to say how much you have earned and how much in expenses you have incurred to come up with ur profit figure on which your taxed upon. So yes diesel, accountant fees, insurance, etc you would get a deduction for.

RCT is separate from the above, its Revenues way of controlling the construction industry by taxing them at source. The 35% deduction is your money that revenue keeps as a security deposit until you file your tax return. If it turns out you don't owe them as much as they hold you get a refund.

galwaydude18

Ok then. So would I be best keeping a diary of where I have worked and receipts for diesel I use for work purposes, tax, insurance etc. ? I understand I could not put in expenses for diesel I use for personal purposes.. Would I use these receipts then to submit to the tax office for expenses incurred?

Kingkong

Well yes but you need to understand a couple of things. I think you need to do a bit of reading.

I recommend reading the following:

(1) http://www.citizensinformation.ie/categories/employment/types-of-employment/self-employment/self-employment-as-an-individual

(2) http://www.revenue.ie/en/personal/circumstances/moving/working-self-employed-individual.html

After you read the above read this its important to understand the difference between being self employed verus employed. You're rights to welfare allowances can be affected when self employed.
(3) www.revenue.ie/en/tax/it/leaflets/rev_dsw.pdf

galwaydude18

I will print out all the above info and hopefully that will clear up my questions or at least most of them.. Thanks for your help

galwaydude18

Ok I have read all that but I can't understand it.. I have never done any business studies or anything lik that before so all of this is new to me..

Kingkong

I completely agree it can be hard to understand at first. What did you think of the self employed guide? Its the starting point really.