Revenue has updated its guidance on Relevant Contracts Tax: Relevant Operations clarifying the treatment of RCT on contracts involving both the construction of property and the sale of land. The guidance also sets out how RCT applies to the deployment of a temporary installation on a site.
The updated guidance states that where a contract includes both construction services and the supply of land, only the construction services’ element is subject to RCT. The construction services are also liable to VAT on a reverse charge basis. RCT and the VAT reverse charge do not apply to the consideration for the sale of the land.
Where the contract provides for a single consideration covering both the construction services and the sale of the land, the consideration needs to be allocated proportionally by the principal.