John M Shanahan & Co.

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Chartered Accountants
Registered Auditors

Phone: 057 93 22100

email: info@shanahan.ie

Contractors Tax

Relevant Contractors Tax - Revised penalties.

January 7, 2015

Included in Decembers Christmas greetings from Revenue has been a tax geared penalty system for Principal Contractors where failure by a principal contractor to operate Relevant Contracts Tax correctly on relevant payments to a subcontractor -  John Shanahan of John M Shanahan Accountants, Tullamore, Co Offaly  outlines its implications.

 

The penalty that a principal will be liable for will be proportionate to the amount of the tax that should have been deducted.

The principal contractor will be liable for a penalty for each instance of non-operation of RCT after 1 January 2015 and this will be based on the status of the subcontractor.

 

  • Where the subcontractor is registered with Revenue and is fully tax compliant and thus liable to a RCT deduction rate of zero, the principal will be liable to a civil penalty of 3% of the relevant payment.
  • Where the subcontractor is registered with Revenue and is substantially tax compliant and thus liable to a RCT deduction rate of 20% - the principal will be liable to a civil penalty of 10% of the relevant payment.
  • Where the subcontractor is registered with Revenue and is not compliant and thus liable to a RCT deduction rate of 35% - the principal will be liable to a civil penalty of 20% of the relevant payment.
  • Where the subcontractor to whom the payment was made is not known to Revenue – the principal will be liable to a civil penalty of 35% of the relevant payment.

In all the above instances Revenue want the principal to submit an unreported payment notification to them.

 

 


 

 Contact John M Shanahan Accountants for expert advice on
Taxation, Business Management, and Financial matters.

Phone 057 93 22100 or email info@shanahan.ie or use our contact form here- Contact Form.

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