AKC News // New VAT rules for Principal Contractors and Sub-contractors - from 1st September 2008

A new system of accounting for VAT for within the construction industry will be introduced from 1st September 2008.

From 1 September 2008, there will be major changes in how principal contractors and sub-contractors in the construction industry account for VAT. Principal contractors and sub-contractors will need to know how to operate the new system and be prepared for the change.

What is the change?

Prior to 1 September 2008 the charge that a sub-contractor makes to a principal contractor includes VAT on that service. The principal pays the sub-contractor and the sub-contractor passes on the VAT to the Revenue Commissioners. From 1 September 2008 the charge the sub-contractor makes to a principal contractor does not include VAT. Instead the principal contractor calculates the VAT on the amount charged by the sub-contractor and pays the VAT directly to the Revenue Commissioners through his/her VAT return.

Full details can be found on the Revenue website www.revenue.ie or by clicking on the links below.

Full details of the new rules (PDF, 656KB)
Summary leaflet for principals and sub-contractors (PDF, 198KB)
Frequently Asked Questions (PDF, 36KB)
Checklist for practitioners (PDF, 100KB)
Checklist for principal contractors (PDF, 88KB)
Checklist for sub-contractors (PDF, 88KB)
Checklist for Public Bodies (PDF, 119KB)
eBrief No. 26/2008
Letter to principal contractor (PDF, 31KB)
Letter to subcontractor (established in the State) (PDF, 31KB)
Letter to principal/subcontractor (PDF, 30KB)
Letter to Public Body (PDF, 31KB)
Letter to subcontractor (non-established) (PDF, 33KB)
Letter to agent (PDF, 33KB)

Date : 03-07-2008