Changes to RCT System

On 1^st January 2012 the new electronic RCT system becomes obligatory for all Principal’s & Subcontractors.

The current paper-based system is being replaced by an electronic system where all interactions between Principal contractor and Revenue will be by electronic means. 

In the new system there will be three rates of RCT; 0%, 20%, 35%. Subcontractors who satisfy the current criteria for a C2 card will qualify for the 0% rate. In certain limited cases, subcontractors will be placed at 35% e.g.  subcontractors who are not registered with Revenue or where there are serious compliance issues to be addressed. All other subcontractors will be eligible for the standard 20% rate.

There will be no C2 cards in the new system.

All principals & subcontractors must ensure that they are registered for ROS as soon as possible as there will be no paper RCT forms in the new system. If assistance is required contact the ROS Helpdesk at 1890 201 106

Changes to new system :

-          Mandatory electronic communication

-          “Contract Notification” – Principals must notify the revenue of the relevant contract. Revenue will acknowledge the notification and advise the principal of the current rate of RCT applicable to the subcontractor

-          “Payment Notification” – Principals must notify the revenue of his or her intention to make a payment and state the gross amount to be paid. Failure to properly notify Revenue will leave principal liable for the RCT.

-          “Deduction Authorisation” – Upon receipt of the payment notification revenue will issue authorisation of the rate of tax and amount of tax to be deducted from the payment. The principal must give a copy of the deduction authorisation to the subcontractor.

-          A “ Deduction Summary” will be issued to the principal, either monthly or quarterly, listing all of the payments Revenue has been made aware of. If the summary is correct, the principal needs only to arrange payment on or before the due date for the return. If the summary is not correct, the principal should make the necessary amendments online and submit the return by the due date and arrange for payment of the RCT deducted on or before the due date. This new process will replace the RCT 30 return.

-          The annual RCT 35 return will no longer be required for the tax year 2012 onwards.

Principals – Important Notice

 Revenue will pre-populate the new system with contract information using data taken from each principal’s 2010 RCT 35 Return, Payments cards issued in 2011 and other data on Revenue’s systems. Principals should access the new system from 05^th December 2011 to confirm what contracts have been automatically notified by revenue on their behalf and to make amendments if necessary.

For further information or our assistance please call our office on 059 9130422 or info@pamccormack.com

 To view Revenue’s Information video please click on link below

 http://www.youtube.com/watch?v=SwHmArug5u8

Are you an employer thinking of taking on employee?

Revenue Job Assist allows employers a double wages deduction in their accounts, if they employ a person who has been unemployeed for 12 months or more.

The double wages deduction may last for 3 years and applies to:

• Wages paid to a qualifying employee in a qualifying employment
• Employers PRSI contributions paid in respect of such wages

Which employees can qualify?

To qualify you must employ a person who has been unemployed for the 12 months immediately prior to the commencement of the employment, and during that time was in receipt of one of the following payments

• Unemployment Benefit
• Unemployment Assistance
• One Parent Family Payment
• Blind Persons Pension
• Disability Allowance

If you take on extra employees under this scheme and your tax affairs are in order, you may also qualify for the Employers PRSI Exemption Scheme.

For further information or our assistance please call our office on 059 9130422 or info@pamccormack.com

In June 2010 the government launced a scheme for promoting Irish job creation

The Employer Job (PRSI) Incentive Scheme means that when you employ additional eligible workers in 2010 you will not have to pay employer’s PRSI in respect of their emplyment for 12 months from the date you are approved for the scheme.

Key scheme criteria include that:

• The employee concerned must have been on the Live-Register (Unemployed) for at least 6 months;
• The job must be full-time and must be new and additional – employers will not be allowed to substitute existing employees to avail of the scheme;
• The employer will be required to furnish an up-to-date Tax Clearance Certificate;
• Employers will be limited to a maximum participation rate of 5% of their existing workforce or, for smaller companies, a maximum of 5 new jobs;
• The job must last for 6 months or more. If it does not the PRSI exempt amounts will have to be repaid by the employer

If you created a job in 2010 before the scheme was launched, you may beneift from an employers PRSI exemption for this job for 12 months from the date from the date you are approved for the scheme.                                                                                                       

Full details of the Employer Job (PRSI) Incentive Scheme are available at www.welfare.ie and from the Employer Job (PRSI) Incentive Scheme section, Department of Social Protection, Floor 2, Shannon Lodge, Carrick-on-Shannon, Co Leitrim at LoCall 1890 927 999 (callers from Northern Ireland or overseas should call the information line at +353 71 91 93313)

In an attempt to encourage the establishment of new companies a three year remission from taxation from profits and capital gains for companies with a tax liability of less than €40,000 per annum was announced in Budget 2009.

Companies that qualify will be fully exempt from corporation tax on trading profits and chargeable gains on the disposal of assets used for the new trade where the total amount of corporation tax does not exceed €40,000.  Where corporation tax for the period is between €40,000 and €60,000, marginal relief will apply.

This relief will apply for three years from the commencement of the new trade. Therefore the company could shelter from tax up to €960,000 of trading profits over a three year period.  The following conditions apply:

-  The company must be incorporated on or after 14th October 2008

-  The company must commence to trade during 2009 or 2010

-  The trade must be a new trade and must not have been carried on previously by another person in the state

- The tax relief will apply for 3 years from the commencement of the new trade.

- The tax relief does not apply to companies that are dealing in land or petroleum and mineral activities.

- The tax relief does not apply to professional service companies.

- The tax relief for companies operating in the road transport sector is restricted to a total of €100,000 over the 3 year period.

For a confidential consultation, without obligation, to discuss your specific requirements please call our office on 059 9130422 or info@pamccormack.com