Do I need to register for RCT

SVDigital

I am just setting up a satellite & aerial installation business as a sole trader. I am in the middle of completing the TR1 but have question about RCT registration.

I have a friend who does Property maintenance as a business, he has said that he can offer me the odd days work when needed doing house rip-outs and other things. Sats & aerials is my main business and he might only have 1 job a month for me, do I need to fill out the RCT section on the form to cover this occasional work.

I just want to get this right from the start.

Thanks for any advice you can offer.

Simon

Alan Shore

Will YOU be engaging subcontractors do to construction related work for YOU?

I suspect not therefore you do not need to register for RCT.

SVDigital

Hi Alan, thanks for the reply.

I will not be using any subcontractors in my day to day aerial & satellite business, it will just be myself. I will simply be doing the odd days work (labour only) here and there for this guy when he has extra capacity and needs extra hands. This might only amount to 1 days work per month but it could be more.

I know I probably should seek advice from an accountant, but though I would ask the knowledgeable people on boards first.

Simon

barneystinson

SVDigital wrote: »

Hi Alan, thanks for the reply.

I will not be using any subcontractors in my day to day aerial & satellite business, it will just be myself. I will simply be doing the odd days work (labour only) here and there for this guy when he has extra capacity and needs extra hands. This might only amount to 1 days work per month but it could be more.

I know I probably should seek advice from an accountant, but though I would ask the knowledgeable people on boards first.

Simon

Based on your description you'll be an employee of this guy.

SVDigital

Had a look at the revenue website and it seems that it maybe the case Barney, he does not want to go down that road so I guess i will have to supply some materials for the job. That will qualify me as a subcontractor as I am taking financial risk.

Mr. Incognito

Oh Dear.

Look, you'll be doing a few odd days as a handyman.

This would not be subcontracting or an employee relationship. You are already self employed. You will be doing additional days as a self employed person.

Account for it in your Form 11 with your normal self employed income.

Dont be making things over complicated when there is no need.

SVDigital

Thanks Mr.Incognito,

As far as I was concerned, I could just invoice the guy as normal for a days work just as I would if I was putting a system in to the house, and then just sort it out with the rest at filling time. It was him that came on to me asking about RCT.

I'll explain your thoughts to him and go from there.

Thanks

barneystinson

Mr. Incognito wrote: »

Oh Dear.

Look, you'll be doing a few odd days as a handyman.

This would not be subcontracting or an employee relationship. You are already self employed. You will be doing additional days as a self employed person.

Account for it in your Form 11 with your normal self employed income.

Dont be making things over complicated when there is no need.

How can you say he's neither a subcontractor nor an employee; he has to be one or the other. Just because its likely to be small money doesn't alter the facts.

namenotavailablE

Worth reviewing the material on this webpage (icluding the PDF file linked in the first paragraph) to see how Revenue evaluate any particular circumstances:

http://www.revenue.ie/en/tax/rct/determining-the-correct-employment-status-of-a-worker.html

My 2c is that it's more likely to be a 'principal + sub-contractor' relationship [the principal seems to be engaged in the construction industry from the OP's initial post (reference to house rip-outs)] but it really will depend on the specific facts.

Mr. Incognito

barneystinson wrote: »

How can you say he's neither a subcontractor nor an employee; he has to be one or the other. Just because its likely to be small money doesn't alter the facts.

No. He doesn't. He can be and is self employed. There is no contract to subcontract onto. People get twisted all sorts of ways. He self accounts and tax gets paid. Don't overcomplicate it.

barneystinson

Mr. Incognito wrote: »

No. He doesn't. He can be and is self employed. There is no contract to subcontract onto. People get twisted all sorts of ways. He self accounts and tax gets paid. Don't overcomplicate it.

Eh? Of course there's a contract for him to subcontract into - the guy giving him the work is a principal contractor - or possibly a subbie himself, we don't have all the facts to know which - engaged to carry out construction operations (defined as "the construction, alteration, repair, extension, demolition or dismantling of buildings or structures").

Regardless of whether the guy giving the OP the work is himself a subcontractor, the fact is that the service being provided, labour for the gutting of a property, is a construction operation; it follows that there is a relevant contract, and RCT applies.

The only alternative is that the OP is an employee, which is more likely in the circumstances described, as it appears to be labour only.

I'm not overcomplicating it; as I keep saying, there's only 2 alternatives if the work involved is construction operations.

EDIT: Actually, just for argument's sake, lets say the OP is VAT registered for his main business (which you are telling him this work should be recorded as a part of) - what should he invoice his friend for when he spends a couple of days gutting a house, and what rate of VAT should he charge...?