Building and Repairs Projects- Relevant Contracts Tax for Boards of Management


Training for Boards of Management on RCT/ VAT- 2013

Educate Together facilitated four Relevant Contracts Tax (RCT) seminars for board members between January and May 2013.  Two of these seminars were held in Dublin (January and April), one in Portlaoise (February) and one in Cork (May). The seminars were presented by Revenue officials specialising in the area.  

Approximately 35 schools (out of 74) have now received training altogether with about 60 people from Educate Together attending over the four evenings.  If anyone would like a copy of the presentation please contact the office.   

Schools must report Relevant Contracts Tax and VAT appropriately to Revenue or the board could end up in real financial difficulty.  It is very important that the board understands the responsibilities involved so you are strongly advised to familiarise yourself with the responsibilities involved if your board was not represented at the training.  

What is RCT?

Boards of Management can be involved in a range of activities including: Construction Projects, Summer Works, Emergency Works, Major Devolved Projects, Additional Accommodation Schemes as well as day to day repairs that bring them within the scope of Relevant Contracts Tax (RCT) and, as a consequence, Value Added Tax (VAT).   Boards are urged to read the following points which are taken from the “Guidance Note for Boards of Management- Relevant Contracts Tax/ Value Added Tax’ document prepared by the Revenue Commissioners, published July 2012.  

Relevant Contracts Tax (RCT) is a withholding tax system that operates in the construction, forestry and meat processing sectors.  Where a principal contractor in those sectors makes a ‘relevant payment’ to a subcontractor, RCT must be operated.  There must be a contractor making a relevant payment before RCT can apply. 

Who is a principal contractor and what is a relevant payment?

Principal Contractor

Principal Contractors are defined in the legislation (Section 530A, Taxes Consolidation Act 1997 as amended).  The definition includes “any board or body established by or under statute… and funded wholly or mainly out of funds provided by the Oireachtas”.  As such, school Boards of Management are principal contractors for the purposes of RCT.

Relevant Payment

A relevant payment is a payment made under a contract for relevant operations as defined in the legislation.  Where a principal contractor makes a “relevant” payment to a subcontractor, RCT must be operated, tax deducted if appropriate and remitted to Revenue.  The whole contract is subject to RCT if any part of that contract is subject to RCT.  

The following are some examples of the types of activities defined as “Construction Operations”’ as might apply to Boards of Management:

  • Building projects such as extensions, new buildings or additional accommodation, erection of structures such as gates, traffic lights, road signs, parking metres and sheds.
  • Alterations such as painting a building, replacing all the windows or doors in a building.  (Minor changes like replacing one window or one door or painting one wall would not be considered sufficient).
  • Repairs- repair of structures and the repair of any part of a building or of any systems that has become part of the fabric of a building- may encompass “emergency works” carried out by the BOM.
  • Repair and Maintenance- e.g. the repair of a broken window by installing a new pane of glass or the repair of a tiled floor by replacing one or two broken tiles.  Building of new roads, footpaths or repairs to existing ones.; the installation, alteration or repair in any building or structure of systems of heating, lighting, air-conditioning, soundproofing, ventilation, power supply, drainage, sanitation, water supply, burglar or fire protection.  If a contract to service a system includes a liability to carry out repairs, then the contract is within the scope of RCT.  Otherwise it is purely a maintenance contract and not subject to RCT.


For a complete list of examples and a full explanation of Relevant Contracts Tax and how it applies to schools please read the Guidance Note for Boards of Management on Relevant Contracts Tax/Value Added Tax prepared by the Revenue Commisssioners.


Address: Educate Together, Equity House, 16/17 Upper Ormond Quay, Dublin 7, Ireland - Charity Number: CHY 11816