Don’t Let the QBCC Sleigh Your Business This Year

Time is of the essence during the festive season, but before you do your Christmas shopping, are your financial statements ready to be submitted to the QBCC?

Builders with a Category One licence and above – that is, builders with a turnover upwards of $800,000+ must submit their annual financial statements to the QBCC by December 31.

Not submitting your annual statement on time can lead to serious repercussions.

What Happens If You Don’t Submit Your Financials?

Partner and Client Director, Josh Robertson says:

This is the third year the QBCC has had annual reporting again and they’re getting better and faster at responding to licensees who don’t lodge and don’t comply. If you don’t send in your report, you’ll get a letter in early January asking why not, and 99 times out of 100, not lodging will result in QBCC triggering regulatory action from the QBCC.

Most builders who don’t submit their report typically know they’re going to fail their requirements and this “triggers some panic”.

There is some breathing space to meet the minimum financial requirements (MFR) and if your license is overall okay, your business is not in dire straits and you can prove your financial position is solid, then there should be no issue with lodging your annual report with QBCC.

>> Visit our QBCC MFR Report and Accounting page to learn more about managing your QBCC obligations. <<

But – and this is a big but – not submitting your financials because you are concerned at what the outcome will be – or because you are having trouble getting around to it, is guaranteed to make your situation worse! Burying your head in the sand can lead to your licence being suspended and before you know it, it’s down tools and your business is in pause mode.

An extreme scenario is becoming an excluded individual with QBCC if your business ends up in liquidation, which means you can no longer hold or operate a QBCC licence.

Josh advises: “If you don’t do anything until the house is on fire, you’re going to be in trouble.”

Top 5 fails when lodging your financials with the QBCC:

1. Not lodging at all. Your accountant should have prepared all your financial statements as at 30 June, signed off by you, and lodged with the QBCC by December 31. Not lodging is one of the fastest way to get the QBCC breathing down your neck.
2. Lodging without checking your minimum financial requirements (MFR). If your Accountant doesn’t specialise in QBCC Accounting, they are unlikely to check before lodging your financials, that the strict MFR requirements are met. That’s why you need an accountant that specialises in the building industry. Lodging without checking your MFR increases the risk of a surprise audit.
3. Exceeding your maximum allowable turnover (MAT). If you go over your MAT by any more than 10 percent, you’ll need to go back and lift the limit on your licence, as well as lodging a new MFR to support the uplift.
4. If your Net Tangible Assets (NTA) drop by 30 percent. This is a sneaky, lesser-known fail. Your NTA is whatever can be turned into cash – debtors, stock, cars, or tools, minus everything you owe – subbies, suppliers, tax office, and employee entitlements. You probably know your turnover off by heart, but what about the Net Asset position on your balance sheet? As a guide, your NTA should be roughly 5 per cent of your turnover. For example, if your turnover is $3 million, your NTA should be $156,000.
5. Using Trusts the wrong way. Here at Xact Accounting, we like to say “Don’t trust the Trust”. The QBCC doesn’t count assets held in a Trust, which means there are additional requirements for the QBCC to operate under a trust. This is a typical area where non-specialist accountants and licensees come unstuck. Trusts are an option, but where possible we recommend trading directly in a company with your family trust as the shareholder of the company. We have a suite of solutions for builders who have Trusts. Talk to us today, and we can do a health check of your Trust and make sure it’s all above board.

We offer all QBCC license holders a complimentary QBCC accounting health check, to see if you’re meeting your licence obligations. So, before you lodge your financials with the QBCC, get in touch with us so we can help nip any problems in the bud.

Call our QBCC Hotline today at: 1300 233 723 or email: [email protected].

Or… visit our dedicated QBCC MFR Report and Accounting page to learn more about how to manage your QBCC license requirements.

Book a free QBCC Health Check