RCT Deduction Rate

17larsson

My company is two years old and I've been at the 20% RCT reduction rate since the beginning. It never bothered me until this year when we got very busy, turnover has tripled this year so far compared to all of last year and a lot of our work is sub-contracting so with more men and material to pay for the 20% is making things a bit too tight for comfort.

I contacted revenue twice and they told me over the phone and in an email that the company has to be at least three years old to qualify for 0%. I see that this isn't true as a sub-contractor I pay, who is only in business two months, has had their RCT reduced to 0%.

Any idea on how to get revenue to reconsider?

mrawkward

Retain a professional accountant in this area, I seem to remember something about offsetting RCT against employer remitted paye etc!!

bbari

mrawkward wrote:

Retain a professional accountant in this area, I seem to remeber something about offsetting RCT against employer remiited paye etc!!

That's correct. I offset the withholding taxes against our P30s.

I think OP is trying to get out of this arrangement where the payer pays the full amount and not deduct anything.

mrawkward

http://www.taxservices.ie/RelevantContractsTaxRCT.htm is worth a look

17larsson

It is handy as PAYE can be offset against it but when we get a subcontractor to do work for us and we have to pay them 100% yet we only get 80% (into the bank) off our principle contractor it becomes hard to keep that going.
I'm going to call revenue again today

bbari

17larsson wrote:

It is handy as PAYE can be offset against it but when we get a subcontractor to do work for us and we have to pay them 100% yet we only get 80% (into the bank) off our principle contractor it becomes hard to keep that going. I'm going to call revenue again today

I'm sure you can offset the withheld RCT against your payable VAT3.