In the wake of some high profile business collapses in the Building and Construction Industry, new regulations from The Queensland Building and Construction Commission commenced on 1 January 2019, with the aim of restoring effectiveness to the Minimum Financial Requirements for licensing and returning the QBCC’s powers to regulate those requirements.
If you hold a contractor grade licence you will, once again, be required to meet annual financial reporting obligations.
Licensees with turnover more than $30 million were required to submit their financial information earlier this year, but those with turnover of less than $30 million need to submit their financial information by 31 December 2019. This means your 2019 financial statements need to be prepared ahead of this date.
You will then need to lodge financial information with the QBCC each year on or before your annual reporting day (which will be different to your license renewal date). The QBCC will notify you when your annual reporting day occurs once you lodge your current year report, but you can apply to change the date if the one allotted does not suit.
The great news is, now your financial information can be lodged via the MyQBCC Portal by yourself or a representative like your accountant. A word of caution though. While it is possible for you to submit this information yourself, there can be significant consequences if you get it wrong.
While the MyQBCC portal does not specifically ask you to enter or confirm your Current Asset Ratio or your Net Tangible Assets - these are the financial tests the QBCC uses to determine your financial risk as a contractor - rest assured, the QBCC will be doing these calculations in the background, using the information that has been submitted.
It will be important, that prior to submitting your financial information, that you are confident that these minimum financial requirements have been met and that a Minimum Financial Requirements Report is not required from your Accountant. These reports are required:
- if your maximum revenue will exceed your current category’s upper limit; or
- if you want to downgrade your license to a lower category; or
- if your Net Tangible Asset position has decreased by more than 30% if you hold a category 3 license or below.
Failure to satisfy the requirements could result in suspension of your license, so it is important to get this right.
If you need some assistance navigating these changes, please get in contact with the team at GTC Financial.