If you’re in the building and construction industry, you should know that you need to lodge financial reports annually to the Queensland Building and Construction Commission (QBCC).
The reporting requirements have changed over time, but since 2019, mandatory annual reporting is back
For the majority of SMEs who will fall in the Category 1 to 3 (this covers turnover categories between $800,000 and $30 million) you will need to submit your information by 31 December each year.
The key requirements cover:
- Maximum Revenue
- Net Tangible Assets
- Current ratio of 1:1 (this means current assets must equal or exceed current liabilities)
It is worth noting that whilst the annual reports will show these figures at a point in time, typically 30 June, continual compliance is required.
Our advice is to ask your accountant to schedule in the preparation your 30 June financial statements as soon as practicable and ask them to test your compliance to the QBCC’s Minimum Financial Requirements. If you fail the QBCC financial tests, there are some legitimate things you can do to rectify this before your accounts are finalised.
Do you have trust structure?
The reporting for sole-trader or trading company licensees is reasonably straightforward to manage. We don’t recommend the use of trust structures for QBCC when setting up new licences, however we find there are always some clients with these trust structures that were established long ago and we know how to deal with these.
If you are using a trust structure (with a company as trustee) here are some things to keep in mind:
- QBCC requires financial statements for both the trust and the trustee company;
- The Current Ratio and Maximum Revenue will be based on both the trust and trustee company.
- You will need to rely upon a Deed of Covenant and Assurance to meet your NTA requirement, in addition to the assets and liabilities of the trustee company (e.g. $2 share capital) but not the trust;
The best way to ensure that you are meeting your requirements is to have regular reviews with your accountants to make sure you’re on the right track. As a minimum a review should be undertaken during the 30 June quarter.
What we can help you with:
- New licence applications
- Financial Reporting for licensees
- Licence upgrades
- Review of your structure and potential restructuring
- Interim reviews to monitor compliance and identify potential issues
Related tag: Small Business Accounting Firm