As of 1 October 2014, the Queensland Building and Construction Commission (formerly known as the BSA), is introducing its new “Minimum Financial Requirements Policy” for licensees.
This new policy is a huge relief for Builders in slashing regulatory burden and the costs associated with preparing reports for the QBCC. Gone are the days of having to submit an Accountants Independent Review Report as part of each annual licence renewal. That’s right – you heard correctly!
The only time you will need to submit a “Minimum Financial Report” under the new policy is if;
You are a new licensee
You are an existing licensee, seeking to increase your Maximum Revenue
You fail to meet the financial requirements
You exceed your Maximum Revenue (previously called Allowable Annual Turnover) by 10%
Your Net Tangible Assets (NTA) decrease by 30% since the end of the financial year
You are changing the amount for the Deed of Covenant – Either Increasing the amount to give you sufficient NTA, or decreasing the amount to reduce your liability where your NTA have increased sufficiently
So What Do you Need to Do?
Monitor your internal management accounts (and notify the BSA if you no longer meet the requirements) –you are required to keep an eye on your accounts quarterly, in line with BAS reporting requirements.
Pay Your Bills on Time. Failure to pay a legitimately owed debt that is not subject to genuine dispute will result in loss of licence. More strict requirements will be enforced and allow QBCC to act quickly where a licensee is failing to pay their debts.
Supply your Internal Management Accounts to QBCC only if specifically requested to do so after the end of a quarter.
What Hasn’t Changed?
You self-monitor your Net Tangible Assets at the end of the financial year, instead of at your renewal date.
Streamlining – the same rules for licensees across the categories - New “Minimum Financial Requirements Report” (when required) is now the same for all categories
The policy has been re-written and definitions clarified, with ease of the reader in mind
Annual Turnover Limits for self-certification categories have increased to $200,000 for trade contractors (from $100,000) and $600,000 for builders (from $300,000)
Allowable Annual Turnover is now called “Maximum Revenue”. It is still calculated based on your Net Tangible Assets, using a set multiplier.
Whilst as accountants we are no longer required to prepare annual Independent Review Reports on your behalf, we can still assist you in both monitoring your financial position to ensure you meet the requirements, and assisting you in advance to ensure you are structured correctly and have the finances in place to do so.
If you require any assistance, or have any questions about the new requirements, please don’t hesitate to call on 07 4325 4694.
For more information, head to http://www.qbcc.qld.gov.au