RCT Sub-contractor Agreements

Overview

Draft and validate sub-contractor agreements for Irish construction and project management with RCT and VAT reverse charge compliance. Ensures Status of the Worker clauses and mandatory VAT wording. Regulator: Irish Revenue Commissioners. Regulation: Relevant Contracts Tax, VAT reverse charge (construction), and Code of Practice on Employment Status.

Example conversation

You: We need a sub-contractor agreement for electrical works on a project in Dublin. The principal is registered for RCT and we want everything Revenue-compliant.

Agent: I’ll draft the agreement with parties, scope of works, and payment terms. I’ll include a Status of the Worker clause stating the sub-contractor is self-employed and the contract is for services, and in the payment/invoicing section I’ll add the mandatory VAT reverse charge statement. Then I’ll run the two checks on the draft. (Produces the draft.)

You: Run the contract auditor and the VAT checker on it.

Agent: (Runs rct_contract_auditor on the agreement.) Status of the Worker and contract-for-services wording are present; no employment-indicator wording flagged. (Runs vat_reverse_charge_checker.) The mandatory phrase “VAT on this supply to be accounted for by the Principal Contractor” is present in the payment terms. Both checks passed. The draft is ready for your review and legal sign-off.

Excerpt of a generated document

The agent produces sub-contractor agreements that follow Revenue guidance. Below is a condensed excerpt: a Status of the Worker clause and the payment / VAT section, plus the vat_reverse_charge_checker report format.

Agreement (excerpt):

## Status of the Worker

The parties acknowledge that the Sub-contractor is engaged under a contract for services and is self-employed. This agreement does not constitute a contract of employment. The Sub-contractor is an independent contractor and is responsible for their own tax, including under the Relevant Contracts Tax (RCT) regime. The Principal Contractor will comply with its obligations under the e-RCT system in respect of payments made under this agreement.

## Payment and invoicing

Payments will be made within [X] days of receipt of a valid invoice. All sums are exclusive of VAT. For construction operations to which the VAT reverse charge applies:

**VAT on this supply to be accounted for by the Principal Contractor.**

The Sub-contractor will not charge VAT on such supplies; the Principal Contractor will account for VAT in accordance with Revenue guidance.

VAT reverse charge checker report (excerpt when wording is present):

======================================================================
VAT Reverse Charge Checker — Ireland Construction
File: sub-contractor-agreement.md
======================================================================

Required wording (Revenue): "VAT on this supply to be accounted for by the Principal Contractor"

  [OK] Mandatory wording FOUND.

RESULT: PASSED — document includes the mandatory reverse charge statement.

Extension tools and validations

The skill includes two extension tools that run as scripts in the agent workspace:

• rct_contract_auditor — Scans a sub-contractor agreement for “Status of the Worker” and related clauses to reduce misclassification risk (self-employed vs employed). Aligns with Irish Revenue and the Code of Practice on Employment Status.
• vat_reverse_charge_checker — Verifies that an invoice or contract template contains the mandatory Revenue wording for VAT reverse charge in construction.

Validations performed by rct_contract_auditor:

1. Status of the Worker / employment status — Looks for explicit clauses: “Status of the Worker” (or equivalent), “contract for services” / “self-employed” / “independent contractor”, “not a contract of employment”, and principal/sub-contractor or “relevant contract (RCT)” references.
2. Employment-indicator wording — Flags phrases that may suggest an employment relationship and warrant review: exclusive service, direction/control by the principal, or integration into the principal’s business.
3. Report — Outputs a plain-text report: file path, check results (OK or missing for each pattern), and a result line (e.g. “Review recommended — add or clarify Status of the Worker” or “Status clauses present; review employment-indicator wording if relevant”). The tool does not give legal advice; it helps ensure the contract clearly addresses status for Revenue purposes.

Validations performed by vat_reverse_charge_checker:

1. Mandatory phrase — Searches the document for the exact Revenue-required statement (case-insensitive): VAT on this supply to be accounted for by the Principal Contractor.
2. Report — Outputs PASSED if the phrase is present, FAILED if it is missing. Use on invoice templates or contract payment sections that will govern construction supplies to a principal contractor.

Getting Started

Add your source materials (e.g. existing templates or project brief) to the project workspace, then activate the RCT Sub-contractor Agreements skill. The agent will draft or review the agreement, run the auditor and VAT checker, and suggest fixes for any gaps.