QBCC licence changes: What they mean for your construction business?
Is your business built to stand the test of time?
In the wake of a number of high profile collapses and insolvencies in the local construction industry, the Queensland Building and Construction Commission (QBCC) is proposing changes to the Minimum Financial Requirements (MFR).
The new Minimum Financial Requirements (MFR laws) are designed to ensure that building and construction industry businesses are operating in a sustainable way. As from 1 January 2019, all builders are now required to lodge and meet the new financial reporting obligations with QBBC when you renew your licences throughout the 2019 year.
The Queensland Building and Construction Commission (QBCC) have proposed and implemented several changes aiming to;
- Strengthen reporting requirements;
- Provide clarity about what can be included with calculating a licensee’s revenue and assets;
- Develop data quality and availability for QBCC; and
- Minimize the financial and social impacts of insolvency.
The key changes
The most prominent changes that are now in effect are as follows:
- Re-introduction of mandatory annual reporting to the QBCC.
- The revenue threshold will be raised from $600,000 to $800,000 for SC2 Licensees
- Licensees must provide more detailed financial information in addition to Accountant prepared financial statements and MFR report including a debtors and creditor report and a statement of cash flows etc.
- Category 4-7 Licensees will need to report decreases in Net Tangible Assets greater than 20 per cent (previously 30%).
As part of the transitional provisions the QBCC will notify licensees in writing of their annual reporting date once the below information has been provided to the QBCC for their review.
- Categories SC1 and SC2 – (Annual Turnover up to $600,000)
- The licensee must provide its required financial information for the most recent financial year to the QBCC by the 31st of December 2019. Therefore the review will be based on the annual financial information for the year ending 30th June 2019.
- Categories 1 – 3 (Annual Turnover between $600,001 – $30,000,000)
- The licensee must provide its required financial information for the most recent financial year to the QBCC by the 31st of December 2019. Therefore the review will be based on the annual financial information for the year ending 30th June 2019.
- Categories 4 – 7 (Annual Turnover over $30,000,001)
- The licensee must provide its required financial information for the most recent financial year to the QBCC by the 31st of March 2019. Therefore the review will be based on the annual financial information for the year ending 30th June 2019.
Poole Group is here to help!
Licensees must ensure that they meet the minimum financial requirements at all times. We recommend that all licensees work closely with us and review the financial performance and position of the business prior to the above reporting dates.
The deadline to provide the financial information for licensees in category 4-7 is fast approaching therefore if licensees have not yet provided us with the relevant information to prepare the 2018 Financial Statements please do so as soon as possible or if you would like to know more about what these changes mean for your business call on us on 07 5437 9900.
Or if you are at all concerned that you are not meeting the new MFR laws or if you expect that you are going to exceed your Allowable Annual turnover drop us an email at poole@poolegroup.com.au or call one of our qualified experts on 07 5437 9900.
Don’t delay calling us, otherwise an audit or license suspensions could be your next building project.