No. They do the same job in the same industry on either side of one border, but the rates, the authority, the reporting and the refunds all differ.
Both schemes exist because construction is full of short engagements and cash, so both governments take the tax off at source and sort it out later. That is where the similarity stops. CIS is HMRC's and applies to construction operations in the United Kingdom. Relevant Contracts Tax is Irish Revenue's and applies to relevant operations in the Republic. Doing a job in Letterkenny does not put you in CIS, and doing one in Londonderry does not put you in RCT.
| CIS | RCT | |
|---|---|---|
| Authority | HMRC | Irish Revenue |
| Deduction rates | 20% standard, 30% higher | 0%, 20% or 35% |
| What sets your rate | Registration and verification | Your compliance record with Revenue |
| Rate if unknown to them | 30% | 35% |
| Paying without deduction | Gross payment status, on three tests | A 0% rate, on an up-to-date compliance record |
| Scope beyond construction | Construction only | Construction, forestry and meat processing |
| Per-project identifier | None | A Site Identifier Number |
| Reporting | A monthly return by the 19th | Contract and payment notifications, per payment, through ROS |
| Getting the money back | Self Assessment, or the EPS for a company | Form IC1 or IC3 to the International Claims Section |
| VAT interaction | The UK domestic reverse charge, section 55A | The Irish reverse charge, where RCT applies to the service |
The third row, what sets your rate, is where the two schemes cost you money. CIS punishes you for not being verified; RCT punishes you for not existing in the Irish system. A Northern Irish subcontractor with an immaculate HMRC record and gross payment status in the UK still starts at 35% on a first job in the Republic, because none of that record belongs to Revenue.
Plenty of trades along the border do, and there is no shortcut: you are in both schemes, on different jobs, and each one has to be operated on its own terms. In practice that means the bookkeeping has to separate Northern Irish work from work in the Republic from the first invoice, because the deductions, the VAT treatment and the route to getting the money back are all different. Reconstructing the split a year later from bank statements is possible and it is not cheap.
How an RCT job runs sets out the notifications, the deduction authorisations and the refund forms in full.
We are a UK practice. We are not registered as a tax agent in the Republic and we do not file Irish returns. What we do is the UK side — your CIS, your VAT, your accounts and your tax return — with the Irish deductions and the Irish VAT treatment carried through into them. If your work needs an agent registered in the Republic, you will need to appoint one there.
Tell us which side your jobs are on and we will set the records up to match. Sole traders from £29 + VAT a month, limited companies from £49 + VAT a month.
No. Gross payment status is granted by HMRC under the UK scheme and has no effect on your Irish deduction rate. The equivalent in the Republic is a 0% RCT rate, and Revenue set it from your compliance record with them. If you have never registered with Revenue there is no record to look at, so the rate is 35%. The two are worth pursuing separately: one keeps your cash on UK jobs, the other keeps it on Irish ones, and neither is evidence for the other.
RCT is operated on the payment the principal makes under the relevant contract, and Irish rules decide how materials are treated. Do not assume the CIS approach carries across. If materials are a large part of what you invoice on a job in the Republic, get the position confirmed for that contract before you price it, because the difference between deducting on labour and deducting on the whole invoice is significant at 20% and severe at 35%.
You are likely to be a principal contractor for Irish purposes on that contract, which brings obligations of your own: notifying the contract to Revenue, notifying each payment and receiving a deduction authorisation before you pay, and giving the subcontractor a copy where tax is deducted. Revenue apply penalties to principals who pay without a deduction authorisation. These are registration obligations in another jurisdiction, separate from your CIS duties. Take advice on them before the contract starts.