In January 2019, the QBCC introduced the new Minimum Financial Requirements (MFR) regulation to help ensure building contractors in Queensland have a strong and financially sustainable business, with an adequate level of working capital. The goal has been to protect builders, contractors and employees alike; reducing financial failure, liquidation and bankruptcy, and ensuring people are paid for their work.
There has been some confusion around what is required on an annual basis to maintain your QBCC licence. Here, we have tried to dispel any confusion and clearly outline what’s required.
QBCC MFR Reporting and Annual Reporting – what’s the difference?
The MFR Report
The MFR Report is the QBCC’s go-to report for clarifying a licensee’s financial position against the mandated requirements. The MFR Report is NOT part of the Annual Reporting requirements and IS required to be signed-off by an accountant.
The MFR Report is required in the following situations:
- Obtaining a new licence
- Increasing or reducing a licensees maximum revenue
- Where instructed to by the QBCC
- When compared to the most recently lodged MFR Report, the Net Tangible Asset Position of a licensee reduces by more than:
- 30% for SC1, SC2 and Category 1-3 licensees
- 20% for all other licensees (Categories 4-7)
- Change of ownership or executive officer
- Reducing reliance on, or when completely removing a Deed of Covenant and Assurance from the licensees NTA calculations (i.e. using only the company NTA).
The Annual Report, to maintain your QBCC licence, needs to be lodged by the required reporting day, and can be done online via myQBCCportal https://my.qbcc.qld.gov.au/s/login/ .
Check your relevant category for information on how to provide your annual financial information. If you are unsure, you can check your category in our online licence search. https://www.onlineservices.qbcc.qld.gov.au/OnlineLicenceSearch/VisualElements/SelectSearchTypeContent.aspx
Haven’t undertaken any contracting in your own right?
The QBCC state on their website, “If you have not undertaken any contracting in your own right, your revenue for the period would be $0 which you would advise QBCC on the Annual Reporting form with details of your assets and liabilities.”
There are two components of the Annual Reporting requirements:
- Financial Statements
- Annual Reporting Form
From 31 December 2019, all licensees must lodge the mandated Financial Statements of their most recent reporting year (i.e. Financial year) – calendar years and other 12-month periods are not permitted, unless previously agreed to by the QBCC. QBCC should have already notified all licensees of their 2020 lodgement dates and following years.
Annual Reporting Form
The Annual Reporting Form is specific to your licence category (see below for links to the relevant PDF’s). It’s important to note that these forms require detailed information and preparation. If you need help from an experienced accountant, the team at Greenhalgh Pickard are here and ready to help.
- Annual Reporting Form Category 1 to 3 https://www.qbcc.qld.gov.au/sites/default/files/Annual_Reporting_Cat1-3.pdf
- Annual Reporting Form Category 4 to 7 https://www.qbcc.qld.gov.au/sites/default/files/Annual_Reporting_Cat_4-7.pdf
You only need to submit a MFR Report if you’re applying for a new QBCC licence or if you meet any of the points listed above. These reports need to be signed off by an accountant.
All QBCC licence holders need to complete an annual report (made up of Financial Statements and the Annual Reporting Form) each financial year. This report does NOT need to be signed off by an accountant.
If you need further advice or guidance on this topic, please don’t hesitate to contact the experienced and friendly team of accountants at Greenhalgh Pickard.