Sole trader but contractor wants to pay RCT?

Danye

If you work as a sole trader and the person who has asked you to do work for them wants to pay you via RCT, is there anything the sole trader has to do?

If the sole trader values the work at €3,000, does he invoice the contractor as normal and the contractor deducts 20% or 35% from that?

Thanks for any advice.

SureYWouldntYa

The subcontractor will need to issue their invoice to the principal contractor noting that the VAT is to be accounted for by the principal contractor (which they do on a reverse charge basis). Other than that the invoice will be as normal

Once the job is done, the principal makes a payment notification to Revenue who will tell them what deduction rate to apply (0%, 20%, 35%), and if 20% or 35% will come off the payment to the subcontractor and be paid over to Revenue

Madd002

https://www.boards.ie/discussion/2058404319/sole-trader-but-contractor-wants-to-pay-rct

Yes that is correct, a perk of this is the 20% RCT deduction sits in revenue as credit. So when the time comes to pay tax & preliminary tax if any due ypu can have it deducted from this and get the balance refunded each year.

Danye

Thank to you both.