Relevant Contracts Tax
Relevant Contracts Tax (formerly also known as sub-contractors tax) is akin to the Construction Industry Scheme (CIS), which is operated in other EU member states.
RCT is a withholding tax mechanism to ensure those involved in construction, forestry and meat processing operations are tax-compliant. The legislation obliges a person (the principal contractor) to retain 35% of the amount payable to contractors/sub-contractors engaged to carry out relevant operations in the absence of a Revenue authorisation (C2) and a related Payments Card.
| Relevant Contracts Tax services | Relevant Contracts Tax team |
Broadly speaking, a principal contractor may include property developers, building companies and all associated building trades, as well as individuals who are connected with these businesses. All government bodies, local authorities, public utilities, boards and bodies established under statute are deemed to be principal contractors under current legislation. It also includes all gas, water, electric/hydraulic power (eg wind farms), dock, canal and railway activities. A person or company is also deemed to be a principal contractor where they sub-contract all or part of a relevant contract under which they are a sub-contractor for RCT purposes.
Where a principal receives certain services, RCT should be operated on payments made to the service provider. The range of services included in the scope of RCT is very broad and can bring some service providers into the realm of RCT unexpectedly, for example telecommunication hardware suppliers, hauliers and offshore exploration/exploitation support services.
Our dedicated team can offer assistance with RCT advisory services as well as compliance issues from both a principal and/or contractor perspective, including dealing with Revenue audits. The Deloitte RCT team is staffed by personnel drawn from Revenue and has a wealth of experience in dealing with RCT in various sectors, including property, construction, technology providers, power generation, PPPs, rail/transport networks and offshore activities.