RCT

alex23

Hi Guys


I use to work as an sub-contractor in the construction industry.Between 2005 and 2008 i couldnt collect over 250k in c45s from loads of small and big contractors.I did all i could to make them send the c45s but i was ignored by the contractors.I complained to revenue about all those people and they told me that is part of the game and i should sue them.I sued one contractor for 35k and the sheriff manage to recover around 12k.After that there was nothing to recover.The solicitor bill was 3k.All those contractors are close now.
About 1 year ago revenue sent me an tax bill for 120k.I told them i never got the tax certs from all this contractors but they didnt cared to much.
I just want to ask if that s the law,if you couldnt recover the tax certs from the contractors why can revenue expect you to pay them back all the taxes from those certs?Now they have a better system,all works online,but few years ago was different.

barneystinson

alex23 wrote: »

Hi Guys


I use to work as an sub-contractor in the construction industry.Between 2005 and 2008 i couldnt collect over 250k in c45s from loads of small and big contractors.I did all i could to make them send the c45s but i was ignored by the contractors.I complained to revenue about all those people and they told me that is part of the game and i should sue them.I sued one contractor for 35k and the sheriff manage to recover around 12k.After that there was nothing to recover.The solicitor bill was 3k.All those contractors are close now.
About 1 year ago revenue sent me an tax bill for 120k.I told them i never got the tax certs from all this contractors but they didnt cared to much.
I just want to ask if that s the law,if you couldnt recover the tax certs from the contractors why can revenue expect you to pay them back all the taxes from those certs?Now they have a better system,all works online,but few years ago was different.

What do you mean when you say you couldn't collect over 250k in C45s? Are you saying these people all deducted 35% RCT from you, paid you 65% of your gross invoiced amounts, and that you never got the RCTDC pink slips from them to state that you had been paid under deduction of RCT?

Or are you just saying that of the amounts you invoiced your principals, over 250k of it was never paid to you?

I think you'll need to be a bit more clear about what exactly happened between you and your principals, and also about what this 120k bill from Revenue is - is it VAT, Income tax, or a combination of the two?

Did you have a C2 at any stage?

alex23

The 250k is the amount i could not collect in c45s and money from the builders.At the time i had a very very bad accountant.I was a new irish citizen and i had no idea how the irish system was working so i hired an accounant.This man never did the returns for me,i use to have 60k in credit in revenue from the c45s i was getting but he wouldnd fill up the returns so i was getting huge penalties.He aloud me to do over 800k worth of business in a sole trader,he never told me to change my company to an ltd.My tax bills were nuts.
Then close to the end of the boom loads of companies were just gone missing.I did few big jobs in Tullamore for a plastering company,they paid the invoice - 35% and that was it.Never got the cert.Complained to revenue big time and they told me to sue him.He is gone to america.I had loads of small builders,extension builders from allover the country,they use to pay the invoice -35% but never send the c45.If you sue them you will find out that they have no money so you have to wait untill they get some cash but the solicitors will cost you at least 3k per case and somethime the amount due was only 1k.
The bill for 120 k is for vat,income tax and 30k penalties.Since then i changed my accountant and my taxes are good now but the 250k i am being charged vat on was never paid to me.My old accountant wasnt doing my taxes in what money were getting in,he was doing my taxes in the base of the invoices.Some invoices for 100k were only paid 50k or less.At the end of the job you invoice the contractor 1k,4k,100k,etc,and he has to pay it.Most of the contractors were good and the invoices were paid but about 20% were cowboys.
Revenue reckon that not getting paid from the contractor is my own issue.Same with the c45s.But in their website they say is illegal to dont issue c45s deducted from the invoice.I sent over 100 complains and nobody ever got any fine.What is illegal then if there is not punishment for ofence?
I am being told to forget about it and just pay the 120k.But that just doest make sense.The law was invented by revenue,35% was deducted without me having a say,but from there is my job to get it from the contractor.But how?
It was my fault for being a young man,27 years old starting a busines in ireland.I didnt expect it to reach 800k in the first year.I just trusted the accountant in dealing with my paperwork.But i also belive if you invent a law you have to create the system so the law can work.You force the contractor to deduct 35% from any invoice but then you dont care if the subcontractor ever gets its tax certs?
I just wonder if there is a company who could represent us in the front of revenue.Mistakes were made.No doubt about that.But was very unfair for me.Here some of the mistakes the accountant did:
1.All the returns in 2 years were done late
2.Never demanded bank statements
3.Never sent returns to CRO
4.He use to issue payslips for my wife but never pay her taxes (she was refused maternity benefits for not working)
5.Never advice to change the sole trader in an ltd after 800k turnover
6.Doing taxes in the best of the invoices not money received
7.In 2008 got an audit.In the first day of the audit i had 57k in credit with revenue,10 months later i had -120k.They found out that there were loads of mistake done.We complained to the ombudsman and they sent a reply blaming the accountant.
I am just looking for a way out this.Thanks for help

lakill Farm

surely your current accountant is been of help trying to chase down the rctdc? (the pink subcontractor form)

alex23

Well we had him having a look at the papers but he doesnt want to say the old accountant was wrong in case we will sue the old accountant and he will have to stand in court.
Things are very very complicate in this case.
If you do work on sole trader you can do around 100k +-,if you go over that your taxes are 42%.I had a turnover of 800k with profits of around 200k.So the tax bill for that alone was around 80k (income tax),then the returns were late each month so the penalties were crazy,then cro sent me a fine for 2k for not sending accounts to them.I knew nothing about all that,i was told all my taxes are up to date.In Italy,Romania,Spain,etc your accountant is your tax expert,he represent you in the front of revenue.In ireland you have to investigate if your accountant does he s job and then is still your fault if he/she makes mistakes.
I know for sure that if you dont get pay from jobs you cant be taxed in that money but this man was doing my taxes in the base of the invoices not the money in.
I should have told to change my sole trader in an ltd after 100k.Like that my taxes were 12.5% not 42%.We belive there is a gap of 200k what we paid and what we should have paid.

dbran

Why would cro fine you if you were a sole trader

alex23

Hi

No c2 . See i started in 2006 with a bad company called JP Homes. After the job was completed they closed down. So i could not collect about 8k in RCT. This money were deducted from my payment. So i started bad. I was thinking this was a accident but easy easy more and more contractors were deducting RCT and no posting the cert. I started complaining to revenue and i was told to sue them. But many RCT deductions were for 300-800 euro so not big amounts worth hiring a solicitor for.
I did apply for c2 but having taxes outstanding was a issue.

So i was blocked between revenue and the contractors