Financial reporting obligations of contractor licensees
As a licensee holding a contractor-type licence, you need to demonstrate through financial reporting that your business can operate sustainably.
Purpose of financial reporting
The purpose of providing financial reporting to the QBCC is to demonstrate that a licensee holding a contractor-type licence can operate sustainably in their business at all times.
Who must provide it?
Licensees who hold a contractor-type licence (individual contractor or company licence) are required to show they can meet the minimum financial requirements to obtain and maintain a QBCC licence.
The following licensees and applicants do not have to meet any MFR obligations:
- nominee supervisor licensees
- site supervisor licensees
- occupational licensees
- building certifiers
- pool safety inspectors.
Financial reporting exemptions may apply for applicants or licensees who have professional indemnity insurance and ONLY seek or hold a contractor licence in one or more of the classes below:
- Building design—low rise
- Building design—medium rise
- Building design—open
- Builder—project management services
- Hydraulic services design
- Site classifier
- fire protection—water-based fire system stream—design
- fire protection—electrical—design—fire alarm systems.
If the professional indemnity insurance held expires (not renewed), then these licensees are required to meet the financial requirements.
If QBCC holds a current professional indemnity insurance policy for a licensee who only holds a class listed above, then the financial requirements (including the annual reporting requirement) is not required to be met.
Change your licence-type
If you are retired, not currently trading in the building industry, an employee, or working for wages, you may wish to change your contractor licence for a nominee supervisor licence. A nominee supervisor licence still allows you to be the employee for a licensed company, but you are unable to contract to perform building work in your own right.
Maximum revenue determines reporting obligations
The QBCC determines your maximum revenue or permitted annual turnover based on your financial position as shown through an MFR report or financial declaration.
Learn more about how to calculate your maximum revenue.
The maximum revenue category you fall into will determine your financial reporting obligations. The higher your turnover, the greater the risk, the more detailed financial information we require. Maximum revenue categories have been streamed into groups that share the same financial reporting obligations:
- SC1 & SC2—up to $800,000 maximum revenue
- Cat 1-3—$800,001 to $30,000,000 maximum revenue
- Cat 4-7—above $30,000,001 maximum revenue.
Types of financial reporting the QBCC requires
If you hold a contractor licence, you are required to demonstrate that you meet the minimum financial requirements at all times.
Depending on your annual turnover, financial reporting to the QBCC may take the form of a simple declaration or it may require reports prepared by a qualified accountant and copies of your financial statements.
There are 2 types of financial reporting that you will need to submit to the QBCC at different times:
- MFR report or declaration
- Annual financial reporting
The requirement for an MFR report or declaration is triggered in certain circumstances when you need to demonstrate you meet the minimum financial requirements to sustain your business.
Licensees with a maximum revenue of $800,001 and higher (Cat1-7) must use an MFR report to demonstrate that they meet minimum financial requirements.
In most circumstances licensees with a maximum revenue of $800,000 or less (SC1, SC2) are only required to provide an MFR declaration, however in certain circumstance the QBCC may require SC1 and SC2 licensees to provide an MFR report.
Annual financial reporting is a once-a-year submission to demonstrate your ongoing financial sustainability. The report is assessed to confirm you are meeting your ongoing financial requirements as per your nominated maximum revenue.
For most licence categories, annual reporting information:
- does not need to have any accounting standards applied
- does not need to be prepared by an accountant
- can be based on your most recent tax reporting/financial year information.