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RCT tax

  • 16-04-2018 3:40pm
    #1
    paddylonglegs
    Registered Users, Registered Users 2 Posts: 3,579 ✭✭✭


    Hello,

    I'm a new sole trader and am still learning the ropes with invoicing and tax, but would really appreciate if something can be cleared up. I'm not registered for VAT as I am below the €75k threshold.

    Most of my work is directly through clients, but I have completed my first job through a construction contractor. I have learned from their accountant that I am liable for RCT on this. According to Revenue, I could be liable to either 0% (with an up to date tax compliance record), 20% (a substantially up-to-date compliance record), or 35% (a poor compliance record, or those who have not registered with Revenue).

    Most likely I will be liable for 35%, I haven't registered for VAT so I assume I am not registered with Revenue? Does anyone know if I am likely to see this 35% again? Or am I able to claim it back eventually?

    I will always be tax compliant but I had no clue about this particular tax and I'm a little confused reading the revenue website. If anyone can shed some light on this I'd appreciate it.


Comments

  • #2
    SRASE
    Registered Users, Registered Users 2 Posts: 86 ✭✭SRASE


    Any RCT deducted be the contractor can be reclaimed by you when filing your income tax return for the year.

    As you are self employed you should register for income tax with Revenue if not already done.

    If you are new in business you should be allocated a 20% RCT rate to begin with. This will be reviewed periodically by Revenue.


  • #3
    Lockedout2
    Registered Users, Registered Users 2 Posts: 402 ✭✭Lockedout2


    WHat services do you provide?

    RCT only applies to services so the VAT threshold is €37500 for services.


  • #4
    paddylonglegs
    Registered Users, Registered Users 2 Posts: 3,579 ✭✭✭paddylonglegs


    Lockedout2 wrote: »
    WHat services do you provide?

    RCT only applies to services so the VAT threshold is €37500 for services.

    I manufacture and install signage, including frosted glass film


  • #5
    paddylonglegs
    Registered Users, Registered Users 2 Posts: 3,579 ✭✭✭paddylonglegs


    SRASE wrote: »
    Any RCT deducted be the contractor can be reclaimed by you when filing your income tax return for the year.

    As you are self employed you should register for income tax with Revenue if not already done.

    If you are new in business you should be allocated a 20% RCT rate to begin with. This will be reviewed periodically by Revenue.

    Ok thank you for this.


  • #6
    Pawwed Rig
    Registered Users, Registered Users 2 Posts: 22,436 ✭✭✭✭Pawwed Rig


    As above you can take a credit for the RCT on filing your return. We also sometimes offset it against other taxes (if any) if cashflow is an issue.


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