I propose to take Questions Nos. 55 and 57 together.
I am informed by the Revenue Commissioners that the legislation governing Relevant Contracts Tax (RCT) is set out in Sections 530 and 531 of the Taxes Consolidation Act 1997. The general position is that the obligation to operate RCT is placed on a principal contractor as defined in the legislation. Thus, in making a payment to a sub-contractor a principal contractor must deduct and remit to Revenue RCT at 35% of the payment being made, except in circumstances where, inter alia, the sub-contractor has a certificate of authorisation, commonly known as a C 2 certificate. In the latter case, a principal may make the payment without deduction of RCT.
I am also advised by the Revenue Commissioners that the legal obligation on principal contractors to operate RCT is cast widely. Taking construction operations as an example, a principal contractor must operate RCT on payments to a sub-contractor not only where the construction work being carried out relates to a third party construction project but also in a situation where the construction work might be carried out on the principal contractor's private residence. It should be noted, however, that the exposure to RCT in respect of a private residence arises only because the contract payment is being made by a person who is a principal contractor. Payments made in respect of construction work on private residences by persons who are not principal contractors would not give rise to RCT.