RCT & Principal Contractors

mozattack

Tough question here I think.

Are plumbers/electician's principal contractors in their own right? I don't think so in that they don't erect buildings and all that jazz.

I am aware that can be P.C. if they subcontractor work from someone who is a P.C. and then hire their own subbies but my question relates to other cases, e.g. I hire a plumber to fix my bathroom, he can't do it so subcontractors to another plumber. RCT? I didn't think so.

CONFUSED!!!! :rolleyes:

Itchianus

mozattack wrote: »

Tough question here I think.

Are plumbers/electician's principal contractors in their own right? I don't think so in that they don't erect buildings and all that jazz.

I am aware that can be P.C. if they subcontractor work from someone who is a P.C. and then hire their own subbies but my question relates to other cases, e.g. I hire a plumber to fix my bathroom, he can't do it so subcontractors to another plumber. RCT? I didn't think so.

CONFUSED!!!! :rolleyes:

RCT only applies to construction operations.

nompere

Itchianus wrote: »

RCT only applies to construction operations.

And construction operations are defined to include:

"Construction operations" means operations of any of the following descriptions:

The installation in any building or structure of systems of heating, lighting, air-conditioning, soundproofing, ventilation, power supply, drainage, sanitation, water supply, burglar or fire protection.

http://www.revenue.ie/en/tax/rct/construction-operations.html

So plumbers and electricians may be principal contractors.

The OP needs proper advice.

dbran

Maybe...

RCT applies to Construction operations which are defined here

http://www.revenue.ie/en/tax/rct/construction-operations.html

I would have thought that the activity you describe would be caught under paragraph c

"The installation in any building or structure of systems of heating, lighting, air-conditioning, soundproofing, ventilation, power supply, drainage, sanitation, water supply, burglar or fire protection;

The installation in or on any building or structure of systems of telecommunications;"

So if they subcontract some of the work to another plumber they must operate RCT. And if you are a director of a company who engages in construction activities you may also have an exposure to RCT yourself depending on the size of the activity.

Regards

dbran

mozattack

Thanks guys for your feedback, I think my problem here is that I am coming at this from an educated background being AITI and ACCA meaning I am possibly trying to over complicate it.

Below is the defination of a P.C. and I don't see how a plumber (in the example) I gave is a PC under the below. Yes they carry out constuction operations but for RCT to apply there must be a P.C., relevant activities (e.g. construction operations) and a relevant contract. Without all 3 RCT doesn't apply.



TCA97 [URL="javascript:xreflink('y1997-a39-s531',%20'c8.t3');"]s531(1)[/URL]
A “principal contractor” is defined as:



· a person who has himself been engaged under a relevant contract with a principal; (NO)
· a person carrying on a business which includes the erection of buildings or the development of land, or any person connected with a company carrying on such a business; (NO)
· a person carrying on a business which includes the manufacture, treatment or extraction of materials for use, whether used or not, in construction operations or any person connected with a company carrying on such a business; or (NO)
· a local authority or a public utility society; or (NO)
· a government Minister acting in his official capacity; or (NO)
· any board established by, or under, statute; or (NO)
· a person who carries on any gas, water, electricity, hydraulic power, dock, canal or railway undertaking; (NO)
· manufacturers involved in making items such as concrete, tiles, doors, glass, paint etc., are regarded as principal contractors and will be affected by the legislation where they have a relevant contract with another person; (NO)
· persons carrying on a business of meat processing operations in an establishment approved and inspected in accordance with the European Communities (Fresh Meat) Regulations 1997 (SI No. 434 of 1997) or, as the case may be, the European Communities (Fresh Poultry Meat) Regulations 1996 (SI No. 3 of 1996), or any person connected with a company carrying on such a business; (NO)
· persons carrying on a business which includes the processing (including cutting and preserving) of wood from thinned or felled trees in sawmills or other like premises or the supply of trees for such processing, or any person connected with a company carrying on such a business; (NO)
· boards or bodies established under Royal Charter that are funded wholly or mainly out of monies provided by the Oireachtas. (NO)

dbran

Relevant Contracts Tax (RCT)

RCT only applies to payments made by a principal contractor to a subcontractor under a relevant contract (this is a contract to carry out, or supply labour for the performance of relevant operations in the construction, forestry or meat processing industry).


Principle Contractor

· a person who carries on any gas, water, electricity, hydraulic power, dock, canal or railway undertaking;

A plumber can therefore be a a principle contractor because they carry out services on water.

Subcontractor

The plumber has subcontracted part or all of the services to someone else so there is a subcontractor relationship in existance.

Relevant contract

This is a relevant contract because presumably the person who he subcontracts the work to, will carry out or supply labour for the performance of relevant operations in construction. In the previous post it was established that the activity was classified as construction.

So the plumber may have to operate RCT on the payments made to his subcontractor.


Regards

dbran

mozattack

Very good answer J and thanks.
My fault here because the example I gave wasn’t great as it is indeed caught by the section quoted. The actually real life example is that of a provider of roller shutter doors… I struggle how they are a PC. Thought?

Itchianus

nompere wrote: »

Itchianus wrote: »

RCT only applies to construction operations.

And construction operations are defined to include:

"Construction operations" means operations of any of the following descriptions:

The installation in any building or structure of systems of heating, lighting, air-conditioning, soundproofing, ventilation, power supply, drainage, sanitation, water supply, burglar or fire protection.

http://www.revenue.ie/en/tax/rct/construction-operations.html

So plumbers and electricians may be principal contractors.

The OP needs proper advice.

The key word there is installation. A construction operation involves installing something in or on a building. a plumber fixing a part of a system already installed is absolutely not carrying out a construction operation.

mozattack

I take it from the above that everyone agrees it is quite confusing!

I still cant see how a company who makes shutter doors and installs them is a principal contractor unless they subcontract the work from a principal contractor (e.g. builder) to another contractor.

Shane732

mozattack wrote: »

I take it from the above that everyone agrees it is quite confusing!

I still cant see how a company who makes shutter doors and installs them is a principal contractor unless they subcontract the work from a principal contractor (e.g. builder) to another contractor.

No.

Why don't you think a plumber can be a PC?

The easiest approach towards RCT is to assume everything is within the scope of RCT work outwards to see if you can get an out.

mozattack

Shane732 wrote: »

No.

Why don't you think a plumber can be a PC?

The easiest approach towards RCT is to assume everything is within the scope of RCT work outwards to see if you can get an out.

So what are you saying then, someone who installs shutter doors for superquinn is a PC. Don't see it I am afraid.

Shane732

mozattack wrote: »

So what are you saying then, someone who installs shutter doors for superquinn is a PC. Don't see it I am afraid.

That's not what I'm suggesting at all.