In Queensland, each practitioner in the building industry needs to be licenced through QBCC and must meet stringent financial liquidity and performance criteria.
A while ago we were writing about QBCC simplifying the reporting for the construction business owners.
Previously, depending on your turnover, you needed to submit reviewed or audited financials with every licence renewal. On the 1 October 2014, this all changed.
Most of you know that you need the financials submitted to QBCC when you apply for a new licence or need to increase your “maximum revenue” for the forthcoming twelve months.
Do you read the fine print and are you aware of all your obligations?
With every licence renewal, QBCC reminds you that you also need to provide them with documented financial information IF:
– your Net Tangible Asset position decreases by more than 30%
– you no longer meet the minimum Current Ratio of at least 1:1
– your Maximum Revenue (MR) needs adjusting (you must not exceed your MR by more than 10% in each financial year)
How often do you discuss this with your accountant before paying the licence renewal?
Are your financials up to date?
Do you review them, do you understand them and are you confident that you comply with the QBCC financial requirements?
If you only see your accountant once a year, you cannot rely on them to check this as it may be too late by then. Moreover, QBCC expects you to review and pass all the financial requirements on a quarterly basis (to be in line with the BAS reporting for the ATO).
While this change was supposed to make things easier and cost saving for the construction businesses, it appears that a lot of them now disregard their obligations as they are not formally enforced annually upon the licence renewal.
Beware that QBCC now started random reviews of the financials (which must be available to them on request). If there are any issues or suspicions raised based on the initial review, these may lead to a full audit with major repercussions.
To avoid any monetary penalties or loss of licence, we recommend you keep in touch with your accountant on a regular basis.
If you have any questions or concerns or simply want to get in touch, don’t hesitate to call us on 07 3160 7386.
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