When mandatory reporting for QBCC licence holders was discontinued in 2014, there was an audible sigh of relief from the building & construction industry.
Since then, companies were only required to report to the QBCC if their circumstances changed or if they were looking to increase their allowable turnover. The QBCC was provided with the power to request information from licensees, but in practice this rarely occurred.
With numerous high-profile insolvencies in recent years, the QBCC feels the need to be able to more clearly monitor the financial situations of licensees and take appropriate action where a licensee may be operating a financially unsustainable business.
As of 1 January 2019, all builders will be required to lodge and meet the new financial reporting obligations with QBCC when renewing their licences throughout the 2019 year.
QBCC changes from 1 January 2019
There are some significant changes that will be occurring from 1 January 2019 which go beyond pre-2014 QBCC requirements. They will be rolled out over 2 phases.
Phase 1 began 1 January and will:
- Re-introduce mandatory annual reporting for all licensees
- Require larger licences to report decreases in Net Tangible Assets of 20% or more.
- Clarify as to what can and cannot be included as an asset with regard to personal recreational vehicles & bank accounts
Mandatory Annual Reporting information is required to be provided by the licensee’s renewal date each year. For existing licensees as at the commencement of this legislation, this reporting requirement applies for the first time if the annual reporting day is 31 March 2019 for category 4-7 licensees and 31 December 2019 for category 1 – 3 licensees.
Phase 2 will implement all remaining reforms discussed above and will commence on 1 April 2019.
And if I fail to meet requirements?
Penalties for not complying with the Minimum Financial Requirements can result in the QBCC placing conditions on a licence or taking steps to suspend or cancel a licence.
Penalties also apply for providing false or misleading information or refusing to supply financial information at the request of the QBCC.
So what does this all mean for QBCC licence holders?
Everyone with a QBCC licence will be affected by these changes in some way. If you currently hold a QBCC licence, you will need to check the category of your licence. If your turnover is between $800,000 and $30 million, you will require a Minimum Financial Requirements (MFR) report prepared by a specialist accountant using your results from 30 June 2019.
MJJ Accounting and Business Solutions have specialists on board to expertly navigate you through the complex maze of QBCC reporting and discuss any questions you may have with relation to the new requirements. Feel free to call us for a chat.