When Should I Upgrade My QBCC Licence?

Did your turnover increase last year? You might be required to upgrade your QBCC license category and/or update your specified Maximum Allowable Turnover as set out in your QBCC Licence. Xact’s Associate Client Director Zoe Wainscott answers the most common QBCC licence upgrade questions asked by builders:

I think I’m going to blow over my MAT – What should I do?

You probably know your turnover off the top of your head – but do you know what Maximum Allowable Turnover (MAT) is?

One of the most important aspects of your QBCC licence is keeping up with your financial obligations – and a lot of this hinges on your MAT. If you do end up blowing over your MAT, you could be subject to an audit, with the loss of your licence as the worst-case scenario.

So how do I go about upgrading my licence?

What you need to do if you exceed your MAT will depend on the type of licence you hold.

For an SC1 moving to SC2, it is a matter of filling in the Self Certifying MFR Declaration on the QBCC website. So long as you can prove you have the required Net Tangible Assets (NTA)*, Bob’s your uncle.

If you’re looking at moving from a SC2 licence to a Category 1 licence or above, the process is a bit more complicated. One of the major differences is that you’ll need an accountant to help compile a Minimum Financial Requirements (MFR) Report to demonstrate you meet the QBCC requirements for the specific license category you are upgrading to. An MFR Report must be signed off by a qualified accountant.

Determining MAT for Category 1 and Above

With SC1 and SC2 licences, the MAT is clearly set. However, the MAT for Category 1 licences and above is determined by your NTA. The MAT within each Category is calculated on a sliding scale.

For example, a Category 1 licensee can turnover anywhere from $800,000 – $3,000,000 – however they will still need to nominate a specific MAT figure that falls within the relevant range. The licensee will then need to hold the corresponding NTA to ensure they meet their obligations.

Note: Licence holders can exceed their MAT by 10% without needing to notify the QBCC.

Who do I turn to for help?

It’s critical that you work with an Accountant who specialises in QBCC MFR Report and Accounting, as you don’t want to have your upgrade rejected. The QBCC has very specific rules when it comes to calculating your NTA, which have a habit of catching out Accountants who are not familiar with the regulations.

If you think you’re close to or have already gone over your MAT, reach out today so we can review your position and help walk you through the steps required to get your licence back on track.

Get in touch – we’re happy to help!

*NTA or Net Tangible Assets are the total assets owned by your business (less intangible assets which include such things as trademarks, borrowing costs, patents, and goodwill). Your NTA determines the maximum amount of revenue you can turnover in the financial year.