Most Queensland builders and tradies know that you need to comply with financial reporting requirements set by the building industry regulator, the Queensland Building and Construction Commission (QBCC).
But do you know when you need to report financial information to the QBCC?
Every year, Queensland builders and tradies are required to provide financial information to the QBCC. The annual reporting requirements were reintroduced from 1 January 2019. The QBCC will allocate an ongoing annual reporting day to the QBCC for every licence holder.
What to report
Queensland builders and tradies need to report to the QBCC that they comply with the QBCC’s financial reporting requirements. It’s a condition of holding a licence with the QBCC that you comply, at all times, with the requirements.
Those in the lower revenue categories, the self-certifying categories (Categories SC1 and SC2), are required to report their current ratio of assets to liabilities to the QBCC. An online reporting tool will help self-certifying licensees comply with this requirement.
Builders and tradies in the middle revenue categories (Categories SC1 to Category 3) are required to report any decreases in their Net Tangible Asset position of 30% or more.
Those in the higher revenue categories have the toughest financial reporting requirements. Category 4 to 7 licensees must provide more detailed information to better equip the QBCC in detecting potential insolvencies. They must report any decreases in Net Tangible Assets greater than 20%.
When to report
Decreases in a licensee’s Net Tangible Asset position is not the only trigger for reporting financial information to the QBCC.
QBCC licensees also need to report financial information to the QBCC when –
- you apply for a QBCC licence;
- the business’s “maximum revenue” needs adjusting;
- the QBCC does a compliance audit into your business;
- the QBCC does what it calls an “an approved audit program”;
- your professional indemnity insurance expires (provided it’s a condition of your QBCC licence that you hold professional indemnity insurance);
- the ownership or officeholders in a company running the building business changes;
- a partnership running the building business is restructured;
- there’s a change or withdrawal of covenantors; or
- the QBCC asks for it.
Navigating and understanding the QBCC’s financial reporting requirements can be time-consuming, complicated and confusing. Make sure you have a really good accountant who understands the QBCC’s financial reporting requirements.
Do you know your annual reporting day to the QBCC? If not, contact the QBCC and find out. Tell your accountant when you’re required to report financial information to the QBCC. Start planning for it early.
Still need help? The QBCC publishes resources on its website to help Queensland builders and tradies understand their financial reporting obligations.
If you run into trouble and receive notices from the QBCC about your licence possibly being suspended or cancelled because you don’t meet the QBCC’s financial reporting requirements, then contact us straight away to discuss your options.
Our Dispute Resolution and Litigation Team are experienced in supporting Queensland builders and tradies with licensing matters. Don’t put your head in the sand and hope that it goes away. It doesn’t. Get it sorted today.