What Happens To RCT When A Subcontractor Doesn’t Have ROS Access?

Published: April 03, 2026

Learn what happens when a subcontractor doesn’t have ROS access under RCT in Ireland, including higher tax rates, payment impacts, and how to fix it.

It sounds like a small thing, doesn’t it? A subcontractor does not have access to ROS yet. Maybe they are new. Maybe they forgot to register. Maybe they just never got around to it.

But in the world of Relevant Contracts Tax, that small gap can cause bigger issues than most people expect.

Because here is the reality. RCT is built around the Revenue Online Service. If a subcontractor is not properly set up on it, the entire flow of payments, rates, and compliance gets affected.

Let’s break down exactly what happens, what it means for both sides, and how to deal with it without causing problems with Revenue.

First Things First, Is ROS Actually Required?

Yes, in practical terms, it is.

ROS is how Revenue:

Assigns RCT rates
Issues deduction authorisations
Tracks payments and compliance

If a subcontractor does not have ROS access, they are essentially invisible in the system when it comes to managing their own RCT position.

That does not stop RCT from applying. It just makes things more restrictive.

What Happens When You Try To Register The Contract

As a principal contractor, your first step is always to register the contract.

Even if the subcontractor does not have ROS access, you can still:

Add their details
Register the contract
Submit payment notifications

So the process does not stop. But the consequences show up in the next step.

The Big Impact, RCT Rate Defaults

Here is where things change.

When Revenue cannot properly verify a subcontractor’s tax compliance status, which often happens when they are not fully set up on ROS, the system tends to assign the highest RCT rate.

That is currently:

35 percent in many cases

This is not a punishment. It is a default position. Revenue simply does not have enough information to apply a lower rate.

For the subcontractor, though, it feels like a heavy hit.

What That Means For The Subcontractor

If a subcontractor is on the higher rate:

A larger portion of their payment is withheld
Cash flow becomes tighter
They may have to wait until filing returns to reclaim overpaid tax

For someone relying on regular payments, that can create real pressure.

And often, they do not realise the issue until they see the reduced payment.

What It Means For The Principal Contractor

From the principal contractor’s side, the responsibilities stay the same.

You must:

Submit the payment notification
Follow the deduction authorisation
Withhold the correct amount

Even if the subcontractor is unhappy with the rate, you cannot change it. You must follow what Revenue issues.

Trying to “fix it” manually or pay outside the system is where serious problems begin.

Common Scenario On Site

This happens more often than people admit.

A subcontractor says:
“I’m not set up on ROS yet, just pay me and I’ll sort it later.”

It sounds reasonable. It keeps things moving. But it breaks the RCT process.

If you pay without a valid deduction authorisation, you risk:

Non compliance penalties
Incorrect tax reporting
Potential issues during a Revenue review

So even if it feels awkward, the correct approach is to pause and handle it properly.

Can The Subcontractor Still Get Paid?

Yes, but only through the correct process.

You can still:

Register the contract
Submit a payment notification
Receive a deduction authorisation

The payment can then be made according to the rate given.

The key point is this. Lack of ROS access does not stop payment. It just affects how much is deducted.

How The Subcontractor Fixes The Problem

The solution is usually straightforward, just not instant.

The subcontractor needs to:

Register for ROS
Ensure their tax affairs are up to date
Allow Revenue to review and assign the correct RCT rate

Once that is done, their rate can change from the higher default rate to a lower one, assuming they are compliant.

This can take a bit of time, which is why delays in setting up ROS often lead to short term cash flow issues.

What Happens To The Extra Tax Deducted

If a subcontractor is taxed at a higher rate due to lack of ROS access, that does not mean the money is lost.

It can be:

Offset against their tax liability
Reclaimed through their tax return

But there is a catch.

They have to wait.

So instead of having that money available during the job, it is tied up until Revenue processes their return.

Why Revenue Takes This Approach

It might feel strict, but there is logic behind it.

Revenue uses RCT to ensure tax is collected efficiently, especially in sectors where underreporting was historically an issue.

By applying a higher rate when information is missing, they:

Reduce risk
Encourage proper registration
Maintain control over compliance

In other words, the system is designed to push subcontractors toward full registration and transparency.

Mistakes Contractors Make In This Situation

A few patterns show up again and again.

Some contractors delay registering the contract because the subcontractor is not ready. That is incorrect. The contract should still be registered.

Others make payments without submitting notifications. That is risky and can lead to penalties.

Then there are cases where contractors try to adjust payments manually to “balance things out”. That is a serious compliance issue.

A Better Way To Handle It

If a subcontractor does not have ROS access, keep it simple.

Register the contract as normal
Submit the payment notification before paying
Follow the deduction authorisation exactly
Encourage the subcontractor to set up ROS immediately

You are not responsible for their setup, but you are responsible for your compliance.

A Quick Example

Let’s say you hire a subcontractor for a job worth 1,000 euro.

Because they are not properly set up, Revenue applies the higher rate.

350 euro is deducted
650 euro is paid to the subcontractor

The subcontractor later registers for ROS and updates their tax position.

That 350 euro is not gone. It can be reclaimed or offset. But in the meantime, they had less cash in hand.

That is the real impact.

Does This Happen Often?

More than you might think.

New subcontractors, small operators, and people returning to work in construction are the most common cases.

Sometimes it is not even about avoiding tax. It is just a lack of awareness.

That is why it is worth understanding how the system reacts before you run into it on a job.

Final Thoughts

A subcontractor not having ROS access does not stop RCT. It just changes how the system treats them.

From the principal contractor’s side, nothing changes. You still follow the process, submit notifications, and apply the correct deductions.

From the subcontractor’s side, the impact is mostly financial in the short term, with higher deductions and delayed access to funds.

The best approach is simple. Handle your side correctly, and encourage the subcontractor to get set up as early as possible.

Because in RCT, small delays at the start tend to echo through the entire job.