RCT Changes

Based on our user feedback, we have redesigned the Relevant Contract Tax (RCT) for Ireland Business Surf Accounts to comply with Revenue.

When a principal enters into a relevant contract with the subcontractor, RCT is applicable to both resident and non-resident contractors operating mainly in the construction, forestry and meat processing unit.

Before we proceed with the new RCT  transaction, please note that your business is RCT enabled.

From the Settings option, select Setup under Accounts and tick the “Enable RCT Transaction” option.

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Figure: Select the “Enable RCT Transaction” to make your business RCT enabled.

Once you select the “Enable RCT Transactions”, 4 RCT VAT Codes will appear in the VAT Rate Pop up for IE business.

See below:

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  • Change in VAT Codes

For RCT enabled business, there is only one VAT code ‘RCT’ is applicable for your customer and supplier instead of multiple RCT VAT rates.  Select the ‘Contacts’ Tab, under the ‘Contacts’ menu select any RCT enabled Customer/ Supplier , the “Defalut VAT Code” for RCT Customer / Supplier will be shown as RCT 0.00% (RCT VAT CODE).

Please note, the RCT VAT code can be changed until there is no transaction with RCT VAT code.

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Figure: RCT VAT code for RCT enabled Customer

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Figure: RCT VAT code for RCT enabled Supplier

Please note, apart from the Standard, Reduced, VAT not applicable (N VAT Rate), Exempted (X VAT Rate) and Zero (Z VAT Rate) only one VAT Rate RCT 0.00% (RCT VAT CODE) will appear under the Default VAT Rate column for RCT enabled customer or supplier for your business.

VAT code from the customer / supplier browses can be changed if the RCT transaction is not posted. It can be changed if non- RCT transaction is posted.

 
  • RCT and Non-RCT Detail Invoice

For RCT Customer/ Supplier in detail invoice the VAT rate will automatically populate as RCT 0.00 % (RCT VAT CODE) under the VAT percentage column. Instead of multiple VAT rates for RCT now you will have only one RCT VAT rate which will show Zero VAT rate.

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Figure: RCT Detail Invoice

Surf Accounts will allow you to create detailed invoices with non- RCT VAT rates (such as Standard, Reduced etc.) for  the RCT Customer / Supplier.

For illustration,see below:

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Figure: RCT Customer Invoice with Standard VAT rate.

  • Change of RCT VAT rate to other VAT Rate

If you wish to change the VAT rate of the invoice, select the ‘Advanced’ option. By selecting the ‘Advanced’ option the “Transaction Details” pop up will appear on the screen. From the “Transaction Details” pop up you can change the RCT VAT to any other VAT rate and save the detail invoice or transaction.

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Invoice lines consisting of RCT VAT Rate, and any other VAT rates (i.e. Standard, Reduced etc.) cannot be saved in a particular invoice. For e.g. if you create an invoice with multiple lines having RCT VAT rate and other VAT rate the following validation message will appear as “Invoice should not be a mix of RCT and non-RCT lines” while saving the same.

For illustration, see below:

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Figure: Validation message appears if RCT and Non RCT VAT rates are applied in two different invoice lines

Please note, RCT transaction does not allow for quick invoices (both sales and purchase).

  • Detailed Receipt and Payment  

For detailed receipt and payment for RCT Customer / Supplier a new field has been introduced as RCT below the “Bank Account” filed under the Lodgement Details.

By default, RCT N/A will appear under RCT column.

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Figure: New field RCT introduced in detailed receipt/ payment, browse for RCT the customer / supplier

  • RCT Rates in Receipt / Payment browse

By selecting the drop down under RCT filed, 3 different RCT rates (RCT0, RCT20, RCT35) will appear including the  N/A option.

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Figure: 3 different rates under the RCT column

  • If N/A is selected, then only the non-RCT transaction will be shown on the allocation grid.

For e.g. here IERCT001 is a RCT customer and the customer one RCT (Invoice No 1) and one non-RCT invoice (Invoice 3).

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Figure: Invoice 1 is a RCT Invoice and Invoice 3 is a Non-RCT Invoice

  • When the RCT is selected as N/A , the receipt / payment will show the non-RCT transaction on the allocation grid.
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  • When the RCT VAT rate is selected to any other RCT rate instead of N/A, (i.e. RCT 0, RCT 20, and RCT 35) the RCT transaction will appear.
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Please note the RCT amount under the RCT column changes as per the selection of the RCT VAT rate. For e.g. if the invoice amount is 500 and RCT rate is 20 then the RCT amount is 100. If the RCT Rate is set to RCT 35, the RCT amount will change to 175.00.  

Allocation grid shows RCT columns for RCT VAT rate. It is disabled and calculated as: (Invoice amount *RCT VAT Rate/100).

For example, if Net amount in 500 and RCT VAT code is RCT20, then transaction VAT will be 0.00. However, RCT VAT= (500 *20/100) =100.

For illustration, see below:
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Please note all the RCT VAT for the customer will be paid once. If any of the invoices is partly paid, then during the next allocation RCT amount will be shown as 0.00 because the RCT will be paid wholly during the first time.

However, if the first receipt is not allocated the RCT amount will be shown on the next receipt.

  • Quick Receipt/ Payment

The quick receipt/ payment will show the non-RCT transaction only in the allocation pop up, with a note in red below the “Auto” and “Reverse” button: “RCT transactions can only be allocated in non-‘Quick’ receipts/ payments”. This note will only appear if there are RCT Invoices.

See below:

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