Jonathan O'Brien (Cork North Central, Sinn Fein)
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To ask the Minister for Finance if Relevant Contracts Tax is to be made applicable to some minor school maintenance work and repairs; if consideration has been given to the likely heavy administrative workload to be incurred by boards of management and the possible difficulties that may arise with regards to ensuring tax liability and compliance; and if he will enter into negotiations with Revenue in order that some consideration is given to introducing a reasonable minimum threshold for RCT and distinguishing between normal maintenance/repairs and large-scale system upgrades, refurbishment or construction works. [43106/12]

Michael Noonan (Limerick City, Fine Gael)
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I am informed by the Revenue Commissioners that contracts for routine maintenance work do not come within the scope of RCT. However, RCT applies to all construction works ranging from major construction projects to general repair works. Repair work includes the replacement of constituent parts of a building or structure. Maintenance on the other hand includes cleaning, removal of graffiti and the unblocking of drains, etc. The need to ensure tax compliance by subcontractors is particularly important where the Exchequer is the ultimate source of the funds being paid out by school Boards of Management and other principal contractors. RCT plays an important role in ensuring tax compliance by subcontractors in these sectors. Therefore, it would not be appropriate to introduce a threshold for this type of work.

In the light of the difficulty some school Boards of Management may be having in fulfilling their obligations under the RCT system, the Revenue Commissioners have made available detailed guidance notes specifically tailored for Boards of Management regarding the operation of RCT. These guidance notes, which clarify the position in relation to repair work and maintenance work, have been published on the Revenue website www.revenue.ie.

From 1 January 2012, the Revenue Commissioners have substantially modernised the operation of RCT following the introduction of a dedicated online facility, which offers principal contractors a fast, efficient and paper free system. This has significantly reduced the administrative burden associated with RCT.

Finally, having regard to the pressures on the public finances, it is important that the RCT system is implemented correctly in order to minimise tax evasion in the construction sector particularly where the project involves substantial State funding. The new online system introduced by Revenue has significantly simplified the RCT process for principal contractors, including school Boards of Management.