Taxes Consolidation Act 1997 section 530A

Principal to whom relevant contracts tax applies

Section 530A identifies the categories of person (referred to as "principals") who are obliged to operate relevant contracts tax (RCT) when engaging subcontractors.

• A wide range of principals must operate RCT, including contractors under relevant contracts, businesses involved in construction, meat processing or wood processing, connected persons, local authorities, housing bodies, Government Ministers, statutory boards funded by public money, utility undertakings and telecommunications installers.
• A person who erects buildings or develops land solely for their own use or for the use of their employees is not treated as a principal for RCT purposes, even if those activities would otherwise bring them within the construction business category.
• A person connected with a construction company is generally exempt from operating RCT where the subcontractor's work is carried out on buildings or land used by that person or their employees, provided the person does not itself carry on a construction business.
• Where the connection arises because the person is connected with a company carrying on a construction business, the exemption for connected persons applies only if the connected person is itself a company.