Relevant Contracts Tax (RCT) using Reverse Charge - Principal contractor

1. Click Suppliers, then click New.
2. Enter the relevant details for the subcontractor.
3. Click Save, then click Close.

Supplier account reference BROWN001 is used in the examples provided.

Create RCT withheld nominal code

If you already have a nominal code for RCT, you can move to the next section.

If not, we recommend you create a new nominal code within the Current Liabilities section of the chart of accounts:

1. Click Nominal codes, then Wizard.
2. In Name, enter RCT withheld.
3. In the Type list, click Current Liabilities.
4. In the Category list, click Creditors : Short Term.
5. In N/C type in 2150.
   NOTE: If required, you can change this to a different number within the current liabilities section of the chart of accounts. 
6. Click Next.
7. Click No, there is no opening balance to enter.
8. Click Create.

Record work completed by the subcontractor

1. Click Suppliers, then click Batch invoice.
2. Enter the supplier invoice details.
3. Click Save, then click Close.

Record the RCT withheld

1. Click Suppliers, then click Batch credit.
2. Enter the information required to record the amount of RCT you're withholding, for example: 
   

   A/C	Date	N/C	Details	Net	T/C	VAT
   BROWN001	Date	2150 (RCT)	RCT withheld	40.00	T9	0.00

3. Click Save, then click Close.

Pay the subcontractor

1. Click Bank accounts and select the relevant bank account.
2. Click Supplier payment.
3. In the Payee list, click the subcontractor's account.
4. Click OK and complete the Date and Cheque No, as required
5. Select the PC, then click Pay in Full.
6. Select the PI, then click Pay in Full.
   
   

   The outstanding amount is the difference between the PI and PC and appears in the cheque box.

    

7. Click Save , then click Close.

A purchase payment is posted for the outstanding amount.

Pay the RCT to Revenue

1. Click Bank accounts, then click Bank payment.
2. Enter the relevant details, for example: 
   

   Bank	Date	N/C	Details	Net	T/C	VAT
   Bank N/C	Payment Date	2150 (RCT)	RCT withheld	40.00	T9	0.00

3. Click Save, then click Close.