A subcontractor who is living in Southern Ireland is working for us, a Northern Ireland company on site in Northern Ireland, he has submitted his invoice and would like payment in € but deducted RCT. We don't have any access to deduct and pay this to Irish tax. Do we deduct?
15th Jan 2021
Irish subcontractor working in NI do we deduct R
Subcontractor lives in Ireland but is working in Northern Ireland do we deduct RCT.
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CIS/RCT is about where you belong, rather than the subcontractor. HMRC will want their money and won't accept your paying Revenue Ireland as an excuse.
You can pay him in € though, no problem.
You follow the normal CIS rules.
There is no difference between the treatment of UK contractors and subcontractors and non-resident contractors and subcontractors.
The Construction Industry Scheme obliges contractors to make payments to subcontractors gross or under deduction, as advised by HMRC during the verification process, or as determined by the contractor where verification is not necessary, regardless of any liability of the subcontractor to UK taxes.
Any non-resident subcontractor who has been paid under deduction and believes they have no liability to UK taxes will have to claim repayment through their SA Processing Office
Where a subcontractor is resident in the Republic of Ireland but is travelling daily to work in Northern Ireland, you should note that there are special provisions in the UK/Ireland treaty. These say that if the subcontractor works on a building site or on a contract within the UK for more than 6 months, a permanent establishment will exist, and the subcontractor is liable to UK taxes. Repayment in these cases can only be made when the UK liability to tax has been agreed and covered
https://www.gov.uk/hmrc-internal-manuals/construction-industry-scheme-re...