0% income/rct tax to 20%

mcneil · 31-08-2015 06:49PM #1

I recently took on a sub contract for some work in construction and after I received payment, I got a letter from revenue saying my rct was 0%. I phoned up revenue and asked them was it because I am on the BTWEA and was told no on the phone. The girl on the phone stated that this is the rate set for everyone's first few RCTs they receive. 2 days later I receive another letter saying my rct is now 20%.

I'm now wondering did the first person who dealt with this set my tax as 0% rightly and the 2nd person make a mistake! Reasons why I'm thinking this is that another guy I know working on same job never got his set at 0% ever but this girl on phone was adament the first few RCTs were set at 0%.

Is there anyone here who knows anything about this rct and woukd you say there's a mistake done calculating my tax.

mickdw · 31-08-2015 06:54PM

Maybe I'm totally misunderstanding but
The rct rate just refers to the percentage a main contractor would have to stop from your payments.
Most people with a clear tax record would be on zero meaning they are paying in all tax at year end.
If your rate is 20 percent, anyone paying you will have to stop 20 percent.
It makes no difference to amount of tax owed in a year.

mcneil · 31-08-2015 07:03PM

mickdw wrote: »

Maybe I'm totally misunderstanding but
The rct rate just refers to the percentage a main contractor would have to stop from your payments.
Most people with a clear tax record would be on zero meaning they are paying in all tax at year end.
If your rate is 20 percent, anyone paying you will have to stop 20 percent.
It makes no difference to amount of tax owed in a year.

Yes I understand the keeping back 20% and they pay revenue but why was it set at 0% until I phoned to double check.

mickdw · 31-08-2015 07:35PM

mcneil wrote: »

Yes I understand the keeping back 20% and they pay revenue but why was it set at 0% until I phoned to double check.

I don't know. Zero I assumed was the common normal rate meaning as a self employed sub contractor, you were paid in full with no tax deductions and paid tax in yourself later

mcneil · 31-08-2015 07:40PM

mickdw wrote: »

I don't know. Zero I assumed was the common normal rate meaning as a self employed sub contractor, you were paid in full with no tax deductions and paid tax in yourself later

O I get you now. I assumed it was because I was on the btwea since last year.

0% income/rct tax to 20%

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