C45 Questions

Decorus

Hi,
Can anyone explain me in simple words few things about C45 and how it works?
Got little job to do and a builder who offered this job said he will give a cheque and c45 form. The questions are:
Do i have to be self-employed to claim c45 taxes back?
Do i have to be registered for VAT?
How much % can i claim? (heard its 20 % or 35 %)
Thanks!

Decorus

Any help will be appreciated!
Thanks!

dbran

Hi Decorus

The C45 system is basically one where the principle contractor is required to withhold 35% of any money paid over to a subcontractor (you) on the cost of labour (not materials) supplied to him by the subcontractor.

You will have to be registered as a self employed individual, but you do not necessarily have to be registered for VAT.

Once you receive the RCTDC from the principle showing the amount of tax deducted you then submit the form to the revenue and they will offset the tax withheld against income tax, VAT, PAYE etc that you may owe. The balance that is overpaid is refunded to you.

Effectively there is no such thing as C45 tax. It is rather a system that is used by revenue to collect a range of other taxes from subcontractors.

Hope this helps


dbran

Decorus

Hi, dbran!
Thank you very much! Appreciate it!
To be registered as a self-employed is really essential? What if I am still getting a doll and this job could be just one for the next half a year, can I claim this withhold amount back or not?

dbran

Hi

Yes you should be registered as self employed.

I presume you would have to notify the DSFA if you are working and claiming.


Kind Regards

dbran

Decorus

Thanks a million!