Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

I thank Deputy Richard Boyd Barrett for his question. Bogus self-employment in the context of the Deputy's question is generally accepted as referring to a practice of employers erroneously describing or treating employees as self-employed contractors.  As the Deputy may be aware, a number of questions have been put down by other Deputies in recent times on this issue, especially as it might relate to the construction sector. Similar to the PAYE system, the electronic relevant contracts tax, or eRCT, system is a tax deduction at source system.

Neither system determines whether a person in the construction sector or, indeed, in any other sector is an employee or a self-employed contractor.  It is important to be clear, therefore, that the eRCT system does not determine whether a person is employed or self-employed. 

As with any contract of engagement in the construction sector, whether a person is engaged as an employee or as a self-employed contractor is determined by the facts and evidence of each case and guidance on that matter is provided in the code of practice for determining employment or self-employment status of Individuals which was prepared jointly by the Irish Congress of Trade Unions, business representative bodies and relevant State agencies.

In regard to bogus self-employment and the RCT1 system, the Finance Act 2007 placed a statutory obligation on principal contractors in the construction, meat processing and forestry sectors to submit to the Revenue Commissioners the details of relevant contracts entered into by those principals and their subcontractors.  Up to 1 January 2012, such details were submitted to the Revenue Commissioners on a form known as a form RCT1.  Under the eRCT system, which came into effect as and from 1 January 2012, form RCT1 is no longer used but the same obligation on principal contractors remains, albeit the information is now supplied electronically rather than in paper format. 

Additional information not given on the floor of the House

There are safeguards built into the eRCT system for those individuals who may have concerns that they are caught up in "bogus self-employment". For example, I am advised by the Revenue Commissioners that when they receive from principal contractors, in real time, the details of relevant contracts in the construction sector, Revenue immediately informs the relevant subcontractor or subcontractors of those details.If a subcontractor is of the view that those details are incorrect, or if the subcontractor is of the view that she or he is not, in fact, a subcontractor but is an employee, then she or he can notify Revenue of those facts.  Revenue will then investigate the matter.

As to investigating what the Deputy describes as possibly large losses in tax revenue to the Exchequer because of abuses of the RCT1 system, the construction sector is an acknowledged area of high risk internationally and Ireland is no different.  I am informed by Revenue that monitoring of the construction sector for abuses of the tax and duty systems forms part of its ongoing compliance programmes to which it commits significant resources. If the Deputy has specific information relating to individuals or businesses groups in any sector who are involved in tax evasion, he should send that to Revenue.  Revenue has provided a tailored template on its website which facilitates reporting of tax evasion and the relevant links are provided for the Deputy's information:  and

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