Updated Relevant contracts tax guidance published

Revenue has updated its relevant contracts tax (RCT) guidance on relevant operations providing  clarification that, in the case of mixed contracts, it is only the construction services which are within the scope of RCT. Where a mixed contract involves a single consideration, the principal must apportion the consideration to identify the amount relating to the construction services.

Examples of mixed contracts are outlined in the guidance, which include the following:

• A contract for construction services and the supply of land,
• a contract to supply design and build services, and
• a contract for the supply and installation of systems in a building or structure.

The guidance outlines that in all cases, it is only the construction services which are subject to RCT and VAT reverse charge. In the case of the examples above, the supply of land, design services and the supply of materials are not subject to RCT.

The guidance on who is a principal contractor has also been updated to reflect the Finance Act 2025 changes which amended references to housing legislation contained in section 530A TCA1997. The Finance Act 2025 changes did not alter the range of principals who are required to operate RCT.