Builders and Contractors New QBCC Requirements – ARE YOU READY?0
From 1 January 2019, the documents required to fulfil the QBCC licence financial reporting requirements changed.
The main QBCC minimum financial requirements changes 2019 are:
– Businesses with sales or turnover up to and including $600,000 or $800,000 (from 1 April 2019) can self- assess by declaring the required values on-line with no financial assistance from their Accounting advisers;
– Small to Medium sized businesses (SME’s) turning over up to and including $30m of revenue must provide:
1. A Profit and Loss statement;
2. A balance sheet;
3. An amounts receivable and payable aged listing and;
4. A statement of Cash Flows.
These reports should generally be accessible from your Accounting system and to save licence renewal preparation costs, they should be considered as part of the financial year-end reports when you do your tax work. The reports required to be given to the QBCC are detailed and care is needed when preparing licence renewals because if Contractor’s get it wrong, penalties can result.
WHO NEEDS A QBCC LICENCE?
In Queensland the Queensland Building and Construction Commission (QBCC) requires that Contractors be appropriately licenced for a vast number of activities involving the construction, erection, renovation, alteration, extension, improvement or repair of a variety of projects if the value of the work exceeds $3,300 (including the cost of materials).
Some general exemptions to these QBCC licence requirements are:
– Work personally performed by the owner of land if the work value is $11,000 or less.
– An employee of an appropriately licensed contractor;
– A subcontractor of an appropriately licensed trade contractor;
– A person in partnership with an appropriately licensed person
If a Contractor is not appropriately licenced, proposed new penalties align Queensland more closely with other states and territories, which generally have higher maximum penalties for unlicensed building work. For example, the maximum penalty in both Victoria and New South Wales is 500 penalty units, with the possibility of 12 months’ imprisonment in New South Wales for second and subsequent offences.
QBCC LICENCE CHECK
To maintain a QBCC licence, licenced Contractors are subject to financial checks to ensure they have a certain value of the Assets in their business to support the level of sales or turnover they make each year. It is fundamentally a test of solvency. If a contractor is found not to have sufficient asset values, their licence can be suspended or terminated and possibly face penalties. This check is called a QBCC ‘MFR’ report form (minimum financial requirement).
The QBCC gives at least forty business days-notice to renewing Contractors.
NBC assists with the licencing renewal requirements for all of our SME QBCC licenced clients and are experts in preparing and providing the correct reports to the QBCC so our clients can be sure their licences are not jeopardised due to incorrect financial information.