Verification

The contractor will have to contact the Revenue to check whether to pay a subcontractor gross or net. Not every subcontractor will need verifying. Usually it will only be new ones.

The verification procedure will establish which of the following payment options apply:

• gross payment
• a standard rate deduction of 18%, which is the current rate of deduction
• a deduction made at the higher rate (yet to be announced but possibly around 30%) if the subcontractor has not registered with the Revenue or cannot provide accurate details to the contractor and the Revenue cannot verify them.

The Revenue will give the contractor a verification number for the subcontractors which will be matched with the Revenue’s own computer. The number will be the same for each subcontractor verified at any particular time. There will be special numbers for subcontractors who cannot be verified. The numbers will have to appear on contractors’ monthly returns and payslips.

Clearly, these numbers are a fundamental part of the new system and contractors will have to ensure that they have a fool-proof system in place for obtaining and retaining them. It will also be very important to give precise details to the Revenue because, if their computer does not recognise the subcontractor, the higher rate deduction will have to be made.