Revenue FAQs

Increase in threshold

From 2022 onwards the threshold is €1,000.

Under the Revenue Commissioner’s approved Small Benefit Exemption Scheme employers can provide employees with a small benefit, this small benefit is not subject to PAYE, USC or PRSI.

The following rules apply:

• The benefit or vouchers cannot exceed €1,000.
• It cannot be exchanged in part or in full for cash. (cash payments are fully taxable)
• Up to two benefits/vouchers can be given to an employee in one tax year.
• Where a benefit exceeds the threshold the full value of the benefit is subject to PAYE, USC & PRSI.
• The benefit or voucher cannot be part of any ‘salary sacrifice arrangement’ between the employee and employer.

‘salary sacrifice arrangement’ means any arrangement under which an employee forgoes the right to receive any part of his or her remuneration due under his or her terms or contract of employment and in return his or her employer agrees to provide him or her with a qualifying incentive’.

The small benefit is traditionally given as a voucher often at Christmas, as mentioned above only two such benefits can be given to an employee in one tax year as where a benefit exceeds the threshold the full value of the benefit is subject to PAYE, USC & PRSI.

Reference
Revenue Tax and Duty Manual

Yes, as schools are employers and also principal contractors, they must be registered with ROS for payroll deductions and also for RCT and VAT returns.  It is no longer possible to file paper returns with revenue.

Schools should apply online via Revenue.ie, ROS Registrations. There are three steps:

1. Apply for ROS Access Number (RAN)
2. Apply for your Digital Certificate
3. Download and Save your Digital Certificate

See link to Financial Guideline P11 2020/2021

Check Downloads, look for a P12 file and save it somewhere accessible.

If you are already registered on ROS for PAYE/PRSI ER, you can add a new registration using Manage Registration under the Services tab. If not, you can complete the TR1 form which is available to download HERE.

How do I fill out the paper TR1 form?

TR 1 Sample Form

https://www.revenue.ie/en/tax-professionals/tdm/value-added-tax/part12-refunds-and-repayments-of-tax/vat-compensation-scheme/vat-compensation-scheme-guidelines.pdf

For schools to qualify for the VAT Compensation Scheme they must provide the following:

• RCN Number from Charites Regulator
• CHY Number from Revenue
• School holds a current Tax Clearance Certificate
• Claims relate to one calendar year only and submitted no later then the 30th June the year following the calendar year to which the claim relates (i.e. first year 2018 for June 2019).
• Full set of audited accounts required for year in question. These accounts must be for the charity’s financial year and the year end of the financial year must be the year to which the claim relates or the year in which the claim is being made. So if school year runs from 1st September 2017 to 31st August 2018 and claim is 1st January 2018 to 31st December 2018 this will pose another problems for schools.
• VAT Invoice must be paid to the supplier
• To calculate qualifying income, a charity should deduct from its total income for the year to which the claim relates, all or any of the following, if applicable:

– educational fees received if the charity is a school, university, institute of

–  technology or educational establishment,

–  income from shops, restaurants and retail outlets,

– refunds or reliefs received under any other scheme or legislation administered by the Revenue Commissioners,

– funding, refunds, and reliefs received directly or indirectly from the state (i.e. DE)

• The amount which may be claimed under the scheme is referred to as “eligible tax” in the legislation and is the amount which a charity may claim under the scheme (i.e. the amount which is eligible to be claimed based on the level of non-public funding received).
• Claims not accepted under €500
• Note the total amount of claims in each year exceeds the capped amount of €5m any refunds due will be paid to charities on a pro rata basis. So after all that, the school may only get a portion of what they are entitled to get.

There is no requirement for schools to have an up to date tax clearance certificate except where they are applying for grants from local authorities who may require proof of tax clearance.  If all taxes are paid up to date i.e. VAT, PAYE etc, you can apply for your tax clearance cert under the ‘my services’ tab and click ‘manage tax clearance cert’ – see link below which gives more details.

Apply for tax clearance online using eTax Clearance (eTC) (revenue.ie)

You will find information under Help on the FSSU website.  We have videos and a booklet ‘Revenue Guidelines for Board of Management‘.

For the purposes of RCT, such operations include

• Construction, alteration, repair, extension or demolition of buildings or structures
• Preparation for the operations above e.g. site clearance, laying of foundations, putting up of scaffolds
• Installation of systems such as alarms, air-conditioning, lighting, heating, sound proofing, ventilation, power supply, drainage, sanitation, water supply, fire protection or telecommunications
• External or internal cleaning of buildings during their construction, alteration or repair (excluding general maintenance)
• Hiring of plant and machinery for all above

It is important to note that professional fees relating to construction works (e.g. architects, quantity surveyors etc.) are not within the scope of RCT and where any part of a contract is for relevant operations then the contract as a whole is a relevant contract and all payments under that contract are liable for RCT.

• Typical building trade services supplied with the construction sector such as electricians, plumbers, bricklayers, plasterers, carpenters, glaziers, labourers, painters, etc.
• Refurbishment or fit out projects
• Contracts providing installation services, e.g. power supply, heat, light, air-con, telecom systems
• Repair, demolition, site preparation and clearance services (including skip hire) Haulage services in relation to construction materials
• Crane hire with operator
• Scaffolding hire with erection services
• Site clearance and provision of access routes
• Operation and maintenance contracts which include repairs
• Any operations necessary to rendering complete the development work

• Where a new building is under construction or an existing building is being refurbished, all the activities necessary to render the building complete would be considered to be construction operations
• In general, all construction operations that form part of ‘rendering a building complete’ are subject to RCT. This is why the likes of cleaning, laying carpets, plastering, painting, fitting, tiling, kitchens and bathrooms all fall under the RCT rules when they form part of a contract to build or renovate a building.

• Notify Revenue of all contracts with subcontractors online
• Notify payments online-before making the payments
• Receive deduction authorisation from Revenue in relation to that payment, indicating which rate (0%, 20% or 25%) of RCT to apply (which broadly will depend on the subcontractor’s tax compliance position). This is again prior to making the payment.
• Provide a copy or details of the Deduction Authorisation to the Subcontractor
• Submit monthly/quarterly returns online
• Make payments to Revenue of RCT deducted

If contract provides repair and maintenance then reverse charge should apply to any services carried out under that contract.

If contract provides that a separate charge should apply where repairs are necessary, then only the repairs element is subject to reverse charge – school charges itself the VAT @ 13.5%.

Supply and installation of fittings are not services within the scope of the reverse charge– separate invoice should be issued charging VAT at 23% for this element of the contract

The reverse charge will not apply to a supply of goods where that supply is not part of a construction service that is subject to RCT.

Yes, all schools must register for VAT as they must operate RCT on construction services. Schools may not claim VAT on purchases but must use the VAT reverse charge.

See Financial Guideline P13 2020/2021

Under the circumstances described above, the only VAT schools need to return is Reverse Charge VAT on construction operations. This VAT should be included in the “T1 box VAT on Sales”. The “E2 box Total goods from other EU countries” should be zero, as there is no requirement to account for VAT on goods purchased from the EU.

You should continue to file Nil returns, where there is no VAT liability.

*Northern Ireland continues to be subject to the same EU VAT rules on goods as other EU member states.

Yes, select Supplementary or Amended option.

If you need to pay more VAT i.e you haven’t paid enough,  use the Supplementary  Return – the original return plus the supplementary return must add up to the total liability due.

If you need to replace the original return i.e you may have paid too much, use the Amended  Return – this replaces the original return made.

Click here for illustrated steps on how to amend a VAT return

Yes, you can amend an RTD:

Log into ROS.

Choose ‘Complete a form online’ again and choose ‘VAT’ and ‘RTD’, then choose the period you wish to amend.

Input the correct amounts and continue to sign and submit.

You will notice in your revenue records that the previous RTD has been replace by the updated amounts.

Where Schools registered for VAT solely for the purposes of reverse charge construction services – schools should pay the Invoice including the VAT on the purchase of Goods and services from the EU and Northern Ireland. Schools should not provide their VAT number.

Goods imported into the State from outside the European Union (Excluding Northern Ireland) are subject to VAT at the point of entry. Schools should not apply for an EORI number. Schools will be required to pay VAT and Duty on UK imports.  This money will be collected by the supplier or haulier.

Schools registered for VAT solely for the purposes of reverse charge construction services are not obliged to self-account for VAT on services received from outside the State. The school should pay the invoice including the VAT to the supplier.

Treat the subcontractor as if they were resident – same RCT rules apply.

Check if they are registered for Irish VAT.

Use their tax registration number, to notify the contract but if number not valid click the ‘tax reference number not available’ box and provide details of the subcontractor. They can claim back any tax deducted using the forms below.

Form IC1 Individual Subcontractor

Form IC3 Company Subcontractor

For further information contact Revenue Tel.: +353 1 738 3680 E-mail: intclaims@revenue.ie

Do not pay any VAT if charged and self-account for VAT @ 13.5% as normal.

RCT/VAT payments are recorded against the same expense code as the construction service they relate to. For example; if the payment to the contractor is posted to Minor Works expense then the RCT/VAT payment is posted to Minor Works expense.  Similarly, if the construction payment is posted to repairs and maintenance, then the RCT/VAT is posted to repairs and maintenance.

A capital construction project of €10,000, with a 20% RCT deduction would be posted as follows:

DR 3900 Capital Building Grant Income         €10,000

Cr 3940 Capital Building Grant Expense        €7329 payment to Contractor

€1482 RCT deduction

€1189 VAT payment to Revenue