Revenue is increasing their compliance interventions in relation to Relevant Contracts Tax (RCT) and the construction sector in general. Revenue has informed us that there will be increased interventions in the sector and to expect additional aspect queries, profile interviews and audits. An increase in the number of unannounced visits to construction sites can also be expected.

According to the correspondence from Revenue, the focus will be on compliance risks including the following:

• Proper operation of the electronic RCT system (eRCT) generally, to include:
• Ensuring that principal contractors are fully reporting payments through the eRCT system
• Principal contractors reporting “Unknown” sub-contractors
• Reconciling reported activity under the Home Renovation Incentive (HRI) with VAT returns filed
• Reconciling reported activity under the eRCT system, PAYE/PRSI returns, VAT returns and examining profit margins
• Proper operation of the VAT Reverse Charge
• Proper operation of PAYE/PRSI obligations
• Ensuring employees are not misclassified as subcontractors
• Ensuring obligations of non-resident principals/sub-contractors are being fully met

The advice from Revenue is for taxpayers in this area to self-review and regularise their affairs before any Revenue compliance intervention begins.

Revenue subsequently published eBrief No. 77/15 which confirms that they are increasing their focus on this sector.