Webinar Q&A: MFR and Annual Reporting - SC1 and SC2

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Review the transcript below of the questions and answers from the live webinar about Minimum Financial Reporting (MFR) and Annual Reporting - SC1 and SC2, recorded on Wednesday 27 November 2019

 

Question

Answer

I am a sole trader Building Designer Medium Rise. It appears a lot of the questions on the form don't apply. It won't let me get past cash and cash equivalents. As a Building Designer, what do I put down for this?

As it is a requirement that all licensees meet the current ratio, the online form contains a validation that at least $1 in current assets must be entered.  However, as a Building Designer licensee you may be exempt from annual reporting if you:

  • hold current professional indemnity (PI) insurance which covers the scope of work for their class of licence with at least $500,000 in cover; and
  • carry out work that is solely within the scope of work for the licence class.

We operate a landscape business under a Builder restricted to structural landscaping licence. 90% of our work is maintenance (non-licence work) and we would only do 10% work that falls into a licensed category. How does this work?

Revenue for QBCC purposes includes income from all sources, only excluding;

  • amounts received as salary or wages, or
  • an amount received for GST payable by your business. 

In your scenario the revenue would include both the 90% maintenance work and the 10% that requires a QBCC licence.

Can I downgrade my licence from contractor to nominee if I am no longer building in my own name so I won't have to do an annual report (ie just annual report for the company)?

As long as the application to downgrade has been approved by the QBCC prior to 31 December 2019, you will not need to submit annual financial reporting  for the individual licence. The company will need to submit financial information by 31 December 2019.

When the licensee is a sole trader do the assets and liabilities requested on the Balance Sheet page relate to the business only or do they also include personal assets and liabilities?  Also what date do these relate to – today's date?  Or end of last financial year?

The financial information provided should be as at the end of your last financial year.  If you are a sole trader, the assets and liabilities should be your entire financial position and not just assets and liabilities included within the business.

If you are trading through a company, the company is a separate legal entity and requires its own QBCC licence and will need to meet the Minimum FInancial Requirements in its own right.

How does the asset of a house work if half of it is in your partner's name?

You can only put 50% of the asset as your non-current asset. Example, the house is valued at $300,000, the non-current asset for the licensee would be $150,000.

I hold a contractor licence in plumbing and gas and work as a full-time employee but do jobs in my time - do I need to do this?

Annual reporting applies to all licensees who hold a contractor licence. In completing the annual reporting form, your revenue would not include any amounts you receive as salary or wages but you would still be required to meet the current ratio and net tangible assets for the self-certifying category you are in.

I re-started my business in February 2018 when I was made redundant and then moved to Queensland. Cash is a little reduced as well as revenue, setting up my business, is there some leniency with the MFR for me?

The QBCC will have a completely different approach to enforcement for licensees with a Maximum Revenue below $30,000,000.   It is important to lodge by 31 December 2019 even if you are concerned you do not meet the requirements. 

There will be a lot of information available and we will have dedicated staff to take phone calls to talk to you about how to comply leading up to 31 December.  We will work with you to assist you in meeting the requirements over the next year. 

To be clear, licensees with a QBCC-approved turnover of less than $30M still need to lodge their information by 31 December 2019, but will have at least a year to strengthen the financial health of their business in line with the financial requirements.

Do your assets include your personal rental house which is not in the business?

If the asset is not in the company's name, it cannot be included in the financial assets for the company. If the director owns this asset, it would be included for their individual financial assets if the director holds a contractor licence and is also required to lodge annual reporting information. 

My husband has two licences for a glazier, one for himself and one for the business which is a trust. Do we have to submit two annual reports?

If your husband and the company both hold a contractor grade licence, then both entities would be required to comply with the annual reporting obligation.

What if the licensee is apart of a partnership? How do you proportion the values?

The annual reporting information should be completed on the trading entity (i.e. the partnership).

My husband holds an Open Builder licence and I also hold a separate Medium Rise licence.  Currently we are both not using our licences but keeping them along with our site supervisor licences for future prospects. We own a principle residence togther so do we work out the total asset and total liability for the home and take 50% of this for each reporting purposes?

Yes, this is correct. To both maintain your licences, you will need to meet the minimum financial requirements and the assets you share will be split by 50%.

Do you have to have a separate myQBCC registration for a company if you are the nominee and already have a myQBCC login?

As the nominee supervisor you will not automatically be granted access to the company's licence through myQBCC.  A company director can log into myQBCC and add representatives to the company's account.

Information on how to add representatives can be found at https://www.qbcc.qld.gov.au/myqbcc-how/myqbcc-adding-other-users-your-account

Are unpaid invoices considered as assets?

Unpaid invoices are a trade debtor and are considered to be an asset.  However the QBCC will deduct 50% of the value of invoices over 180 days from the invoice date and 100% of the value of invoices over 365 days in its calculations.

If I received my licence after July 2019 what year end date do I put in under the confirm licensee details?

The year end date should be for your last financial year.  It is likely that you used 30 June 2019 financial information to obtain your licence, so that would be your most recent reporting (or financial) year.

Should reporting period for an annual report lodged no later than 31 Dec 2019 be up to that date or for FYE 30 June 2019?

The financial information lodged for annual reporting should be for your most recent financial year (i.e 30 June 2019 for most licensees).

Can I confirm that I understand correctly - as an accountant, I will need to log into my clients' myQBCC profiles in order to lodge the annual reporting and I cannot create an accounting firm login and submit annual reportings for multiple clients?

Each client can grant you access as an accountant to lodge financial information on their behalf. A company director can log into myQBCC and add representatives.

Information on how to add representatives can be found at https://www.qbcc.qld.gov.au/myqbcc-how/myqbcc-adding-other-users-your-account

In the fire industry what if I don't do any construction work and it is all routine service work? Is this considered revenue outside construction?

Servicing of fire protection services is included in the definition of building work, as such this should be included in revenue associated with construction work.

Regardless of where you place the revenue it is just important to include all your income.

Should cost of sales include payments to subcontractors and/or wages paid to employees?

Cost of sales is the accumulated total of all costs used to provide or create a service. Therefore, all wages should be included in the cost of sales. However, unpaid payments to subcontractors would be creditors and should form part of your creditors listing in liabilities.

What is the reporting period for the annual report e.g. FY18/19?

The reporting period is your reporting financial year, this would likely be 30 June 2019 financial year.

Is there any specific NTA requirements for a trust?

A trust is not a legal entity, as such it is the trustee which must obtain a licence and meet the minimum financial requirements.

In completing a Self-Certifying Declaration or MFR report, your Net Tangible Assets would not include any assets held on trust.

This is separate to the annual reporting obligation.  For the annual reporting requirement, the information should be disclosed for the trading entity.

I'm just wondering if you can discuss Pty Ltd scenario and how director's loans are handled for reporting?

Any director's loans or related entity loans need to be collectible under section 15 (l) of the MFR.

Evidence of collectability is by way of balance sheet or statement of financial position for that related entity, as at the same period end date as the financial year-end you have used for your lodgement. Most likely to be 30 June 2019.

In relation to annual reporting, the financial information disclosed should include all related entity loans, regardless of whether they meet the requirements for an asset under section 15 (l) of the MFR.

So Building Designers are not required to lodge anything by 31 Dec 2019?

A Building Designer licensee may be exempt from annual reporting if you:

  • hold current professional indemnity (PI) insurance which covers the scope of work for their class of licence with at least $500,000 in cover; and
  • carry out work that is solely within the scope of work for the licence class.

For cash, do I put in the amount of cash that I have on the day I lodge my report? Or I need to have that amount of cash for a certain period of time?

The cash is based on the reporting year-end you use. For example, 30 June 2019 is your most recent financial year, the cash would be based on what was in your bank as at 30 June 2019.

How do you know whether it is lodged or not?

If you have lodged online you should have received a reference number on acceptable lodgement and a confirmation email.

Licensees who have already lodged will receive an email shortly confirming QBCC's receipt of your submission.

We trade as a partnership but my husband is the licence holder. We run our business from home but have two mortgages, one in his name and the other in mine. Are both classed as assets?

For annual reporting, the financial information disclosed should be for the trading entity (i.e the partnership).

In relation to completing a MFR Report or self-certifying declaration, the Minimum Financial Requirements applies as follows for a licensee trading in partnership:

  • Current Ratio: A calculation based on the QBCC current assets and current liabilities of the licensee and partnership combined.
  • Revenue: A calculation based on the income from all sources of the licensee and partnership combined.Net Tangible Assets: A calculation based on the QBCC Assets and all liabilities of the licensee. 
  •  

However as a partner in the partnership, the licensee's share of the partnerships equity is an asset(or liability) of the licensee.

Can you please provide the formula for calculating NTA based on revenue?

The QBCC has an online calculator to assist you in calculating either your Maximum Revenue or the required Net Tangible Assets.  The calculator is available at  https://www.qbcc.qld.gov.au/mr-nta-calculator

If you run a national company is your profit and loss only on the business generated in Queenslan? Also what if you don't run a state balance sheet and all is recorded under your head office in Victoria?

Revenue for QBCC purposes includes income from all sources, only excluding:

  • amounts received as salary or wages, or
  • an amount received for GST payable by your business. 

Revenue is not limited to revenue generated in Queensland or revenue related to building work.

What if you don't have your 2018/19 financials back from the accountant. Can you lodge 2017/18 financial data?

Licensees under $30M Maximum Revenue are not required to provide signed financial statements.  Under $30M licensees are only required to provide internal management accounts.

You do not need your accountant to prepare this information, you can pull this information from MYOB, Xero or whichever system you use, that can print out your internal management accounts. However, if your accountant has already completed this for you or your company for 2018/2019 financial year, you could ask them for a copy of this and you can then upload this information.

We operate as a trust and have two licences.  I assume it is the main contractor licence we are lodging against. If so, are the assets and liabilities those owned by the person or by the trust?

If both entities hold a contractor grade licence, then both entities would be required to comply with the annual reporting obligation.

It is hard to answer your query on what information to provide as we do not know your exact structure.

If a licensee is trustee for a trust and trades through the trust, then the annual reporting information should be provided for the trading entity (i.e the trust).

If the second licence is held by an individual as a director of a company, then the annual reporting information for the individual should be their stand-alone financial information.

I have just recently obtained my Builder license and have not yet completed any work with my licence but am working as a carpenter at the moment. Do I need to submit the revenue of my subcontractor work?

Yes, your revenue includes all your income and is not limited to work that requires a QBCC licence, or income earned in Queensland.

Revenue for QBCC purposes includes income from all sources, only excluding;

  • amounts received as salary or wages, or
  • an amount received for GST payable by your business. 

Regarding the profit and loss section, won't you need the annual report from the accountant to complete this section for the 2018/2019 financial year?

You do not need your accountant, you can pull this information from MYOB, Xero or whichever system you use, that can print out your internal management accounts. However, if your accountant has already completed this for you or your Company for 2018/2019 financial year, you could ask them for a copy of this and you can then upload this information.

How do you convert to nominee supervisor/site supervisor from reporting licence?

To amend your licence to a nominee supervisor grade, you will need to complete and lodge the Change Licence Type Application form with the appropriate fee.
https://www.qbcc.qld.gov.au/sites/default/files/Change_Lic_Type_Individual.pdf

I haven't been active in the building industry as a source of revenue for the past few years but kept my licence for building my own home/s.  Obviously I would need to put $0 as construction revenue and would I then need to declare my salary from my other job in other revenue? Is that an issue?

This is not an issue; however, it should be noted that revenue excludes:

  • amounts received as salary or wages, or
  • an amount received for GST payable by your business. 

Therefore, your revenue would not include your salary from your other job.

Annual turnover is calculated for revenue in Queenslan only or Australia-wide?

Revenue for QBCC purposes includes income from all sources, only excluding:

  • amounts received as salary or wages, or
  • an amount received for GST payable by your business. 

Revenue is not limited to any state, country or location.

I've moved to Melbourne and I had to renew my QBCC contractor licence to acquire a VBA plumber licence, do I need to submit anything as I will only be working in Victoria at this time?

While you continue to hold a QBCC licence, you will be required to lodge your annual reporting documentation by 31 December 2019.

Please be aware when completing the lodgement, revenue for QBCC purposes includes income from all sources, only excluding;

  • amounts received as salary or wages, or
  • an amount received for GST payable by your business. 

Revenue is not limited to any state, country or location.

What if I don't have financial statements back yet for year ending 30 June 2019?

For a self-certifying licensee or Category 1 -3 licence, you do not need to provide signed financial statements for annual reporting purposes, therefore you can provide internal management accounts that can be printed directly from your accounting software such as MYOB, Xero or whichever system you use.

If a licence holder is not currently trading under their licence (so they don't have any revenue from construction) but they do earn wages/salary, is the wages entered under other revenue? Also, what category would their business structure be, as they are not trading.

If you have not traded and have only earned wages, then your revenue would be $0.

I presume the financial year is the year to 30 June?

Yes the annual reporting information should be provided for your last financial year.  For most licensees, or if you are unsure, this will be 30 June 2019.

I trade under a company in Victoria with 3 million turnover but I don't have any revenue in QLD. Which category applies to me?

You would need to complete the Cat 1-3 form (under $30M), as the revenue for QBCC purposes includes income from all sources, only excluding;

  • amounts received as salary or wages, or
  • an amount received for GST payable by your business. 

Revenue is not limited to any state, country or location.

What if we have two licence numbers?

If both entities hold a contractor grade licence, then both entities would be required to comply with the annual reporting obligation.

If you have a licence but currently don't earn anything but salary and wages does this mean the wages are declared as revenue?

If you have not traded and have only earned wages, then your revenue would be $0.

Is your house included in Current Assets or Non Current Assets – Partnership?

A house is a non-current asset unless the house is currently listed for sale to be sold in the next 12 months, then it would be listed as a current asset. If the property is owned by multiple people, only the percentage owned for the individual or licence would be included.

Do we submit the same figures for both submissions?

No the information submitted would be for each entity seperately.

If you hold a contractor licence as a director of a company and also as an individual,the company's submission would be based on the company's financial position and be based on its financal statements.

The submission as an individual would be prepared on your personal financial position.  If you solely work through the company and only receive a salary or wage from the company, then it is likely your revenue would be $0.  Please note revenue for QBCC purposes includes income from all sources, only excluding ;

  • amounts received as salary or wages, or
  • an amount received for GST payable by your business. 

Do you need to report cash flow figures?

A cash flow statement is only required for a licensee in Categories 1-7 (i.e a licensee with a Maximum Revenue over $800K).

Can a family member create an account on behalf of the licensee?

Anyone can lodge on a family member's behalf but they would need to be set up in myQBCC to do so.

If I operate through a trust I don't include trust assets? This means trustee company is the licencee which is a $2 company. What's going on with the deed of covenant? How do I get assets into the company?

For the current ratio, the trust current assets and liabilities are used, therefore the trust financial information should be uploaded for the annual reporting submission. The net tangible asset position of the company being $2, would then require a deed of covenant and assurance to then reach the $46,000 net tangible assets required for a self-certifying licence.

So I have assets and liabilities with my partner. Do I halve these assets and liabilities in my report?

Yes you would need to halve these assets. Example $300,000 valuation for a property, would be $150,000 listed for the asset for you as the licensee.

I trade only through my company licence not my personal licence so what do I actually report for the personal licence. There is zero income from trading.

The annual reporting submission as an individual would be prepared on your personal financial position.  If you work solely through the company and only receive a salary or wage from the Company, then it is likely your evenue would be $0.  Please note revenue for QBCC purposes includes income from all sources, only excluding'

  • amounts received as salary or wages, or
  • an amount received for GST payable by your business.

I am a pest controller. I operate alone, I do not employ anyone or contract anyone. I do not carry out construction work. I turn over up to $300,000. Do I have to report?

Yes, the annual reporting requirements applies to holders of a termite management licence.

The form on the website 00085_MFR_ SELF CERT-CAT2 (SC2) DEC Version 4, April 2019 is much simpler, can we just use this?

Unfortunately the requirements for annual reporting are different to the Self-Certifying form required on application or to amend your Maximum Revenue.

The offline PDF form for annual reporting contains the same questions as the online lodgement.
https://www.qbcc.qld.gov.au/sites/default/files/Annual_Reporting_SC_1-2.pdf

Why are all assets to be included, however all liabilities aren't included?

All liabilities should be included.

What business structure would I choose for a licensee who is not trading under their licence and only earning wages?

If you are not trading, and only an employee on wages, then you can either hold a QBCC nomineesupervisor or trade contractor licence.

To amend your licence to a nominee supervisor grade, you will need to complete and lodge the Change Licence Type Application form with the appropriate fee.
https://www.qbcc.qld.gov.au/sites/default/files/Change_Lic_Type_Individual.pdf

Unfortunately I was late at joining the webinar is there a guide to use to help me fill out the form?

There is an information guide available online.  The QBCC has prepared a guide for each licence category.
https://www.qbcc.qld.gov.au/myqbcc-how/myqbcc-how-lodge-annual-reporting-mfr

Licensee is a company that acts solely as trustee. Thus it does not trade. Where do you get the balance sheet info from?

The information required would be based on the trading entity, so if you trade through the trust, it would just be the trust information required.

If the licensee is a trustee of a trust, do they include the assets and liabilities of the trust as part of their reporting?  The trust is not trading in construction.

The information required would be based on the trading entity, so if you trade through a company as well as trade through a trust (regardless of whether it is construction related), it would be the combination of both. 

Do you report if you only got Low Rise Builder Licence in October 2018.

Yes. The annual reporting information would be based on your most recent reporting or financial year, which is likely to be 30 June 2019.

My licence is in a company. I trade through a trust. Do I use the balance sheet for the trust to complete the balance sheet section?

The information required would be based on the trading entity, so if you trade through the trust, it would just be the trust information required.

Is a director loan a non current liability?

It would depend on the repayment terms and conditions of the loan.

What if you haven't lodged your tax return for year ended 30 June 2019?

For a self-certifying licensee or Category 1 -3 licence, you do not need to provide signed financial statements for annual reporting purposes, therefore you can provide internal management accounts that can be printed directly from your accounting software such as MYOB, Xero or whichever system you use.

My understanding is that the amount of money that has been paid to sub-contractors shall be considered as the operation cost, is that correct?

Yes, expenses for QBCC purposes are costs incurred in the ordinary course of business.

So let's say Michael is married. The loan for the house is in both the names. He trades as a sole trader. Do you split the value of the house 50/50 or is it all treated as his asset? A trust is not a seperate legal entity so wouldn't the reports be only in the trust name?

You can only put 50% of the asset as your non-current asset. Example, the house is valued at $300,000, the non-current asset for the licensee would be $150,000.

I hold a QBCC builder low rise contractor licence. I also hold a nominee supervisor license as a building designer. I reside in New South Wales and have done no work in Queensland for four years. I am building in NSW under a NSW license. What reporting do I need to do?

Revenue for QBCC purposes includes the total income you receive from the building industry and any other source including outside Queensland and overseas, but excludes wages, salary and GST.

As a SC1 does the assets component for a home mortgage get halved if the home is in joint names of husband and wife?

You can only put 50% of the asset as your non-current asset. Example, the house is valued at $300,000, the non-current asset for the licensee would be $150,000.

Do expenses include all details like accountancy, bank fees, stationery, repairs, workers compensation, insurance etc?

Yes, expenses for QBCC purposes are costs incurred in the ordinary course of business.

Our company does not do any construction work at all. Why do we have to comply with these rules. We only do domestic pest control treatment. Also we operate as a family trust so does our family home form part of our assets if they are owned by husband and wife and only husband is director of company/trust.

All licensees who hold contractor licences are required to submit information for annual reporting purposes.
If you hold a company licence and it trades through a trust, the annual reporting information would be based on the trust's position as the trading entity.  If your family home is owned by husband and wife, and not by the trust, it would not be considered to be an asset in the trust.

If my accountant is filling out the financial information online do they put their contact details or mine?

It would be the licensee's contact details.

Could you please explain partnership rules again, if my husband is the tradesman?

The information required would be based on the trading entity, so if you trade through a partnership as well as trade personally, it would be the combination of both.  If you only trade through the partnership, it would just be the partnership information required.

Are work vehicles in the company name valid as net tangible assets?

Yes, absolutely.

If you hold a contractor licence in your individual name and also in a business name, but do not contract under the individual licence only the business licence, what needs to be reported for the individual licence? Is it a nil income because it all goes under the business?

Yes, all licensees who hold contractor licences are required to submit information for annual reporting purposes.  If you do not trade through your personal licence, your personal revenue would just be nil. You could also consider downgrading your personal licence to a nominee supervisor licence.

I don't work with my licence. Do I still need to submit the financial report?

If you are not actively using your licence you will still be required to provide your financial information to QBCC annually. You can report that your turnover is $0, but you still need to hold the required Net Tangible Assets to support your licence category.

So basically annual reporting will require getting their personal assets and debts in addition to sole trader business details, so putting these together in reporting?

The information required would be based on the trading entity, so if you trade through a partnership as well as trade personally, it would be the combination of both.  If you only trade through the partnership, it would just be the partnership information required.

The scenario where the asset is owned jointly and the value needs to be halved, does that also mean the liability owing on that asset will be halved?

Yes, that is correct.  It is only your portion of the asset, and similarly only your portion of  the liability.

If you sell an asset is this revenue?

Revenue for QBCC purposes includes the total income you receive from the building industry and any other source.

Obviously I wouldn't be able to provide a profit and loss if I haven't been active in the construction industry - do I supply a copy of my tax return from my salaried job?

Revenue for QBCC purposes includes the total income you receive from the building industry and any other source including outside Queensland and overseas, but excluding wages, salary and GST. If your income is solely the salaried job, you would just complete nil in the turnover section.

If I am working a salaried job, with no construction revenue. Wouldthe expenses I have to report then be all my personal expenses i.e. cost of running kids + car rego + car insurances + groceries etc?

Revenue for QBCC purposes does not include salary, and the expenses for QBCC purposes are costs incurred in the ordinary course of business.

The declaration forms that you can print out on the website, can they be used instead of filling in the information online for SC1 and SC2?

Unfortunately the requirements for annual reporting are different to the Self-Certifying form required on application or to amend your Maximum Revenue.

The offline PDF form for annual reporting contains the same questions as the on-line lodgement.
https://www.qbcc.qld.gov.au/sites/default/files/Annual_Reporting_SC_1-2.pdf

Is it  earnings from June 2018-2019?
Or is it from June 2019 till no?, I have only opened my business this year so I didn't start working until March. Do I show earning from when I received my contractor license in March 2019 till 30 June 2019.

If your most recent reporting year is 30 June 2019, your turnover would be recorded as at that date (i.e for the financial year from 1 July 2018 to 30 June 2019.)

Our accountant and bookeeper set up the accounts and we have never used cashflow, what do I do?

Cash flow statements are required for financial information with a period end date after 1 January 2019.

The transitional provisions only applied to a requirement that was not in place when the Regulation commenced.  The financial information being provided for the 31 December 2019 annual reporting should be prepared after the Regulation commenced on 1 January 2019. 

We operate as a company, do we include assets owned by the company director? Our company doesn't own much assets, but my husband (company director) does.

No, a director's assets are legally owned by the director, and not by the company.  If a company wants to include a director's assets to increase its own net tangible assets, this would be through a MFR Report and a Deed of  Covenant and Assurance (this is not relevant for annual reporting purposes).

Our business trades mainly in NSW with about a 2% turnover in QueenslandD.  Which figures do I report on?  

Revenue for QBCC purposes includes the total income you receive from the building industry and any other source including outside Queensland and overseas, but excludes wages, salary and GST.

I have got my contractor licence within the past financial year but have not set up my business yet. Can I report $0 of revenue?

If you are not actively using your licence you will still be required to provide your financial information to QBCC annually. You can report that your turnover is $0, but you still need to hold the required Net Tangible Assets to support your licence category.

I got a trade contractor licence with the view of starting a side hussle, but have never traded to date, will zero income be acceptable, along with my personal asset and liabilities statement?

If you are not actively using your licence you will still be required to provide your financial information to QBCC annually. You can report that your turnover is $0, but you still need
to hold the required Net Tangible Assets to support your licence category.

I have a nominee supervisor licence and a contractor licence, do I only do an annual report for the contractor licence or do I have to do both?

You only need to lodge one annual reporting submission, covering your revenue, assets and liabilities.

When you mentioned that sole traders include their own personal property - I take it this is just for calculating the NTA not for reporting on the BS?

Yes, a personal property can be included as an asset for a sole trader.

What if you have reported already but made a mistake?

If a licensee realises they have made an error with the information already lodged, it is advisable that they send an email to annualreporting@qbcc.qld.gov.au and we can assist you through the lodgement process.

If a builder is just a nominee for a company but has an individual licence that they do not have any turnover, what do they do when they fill in their personal financial information request?

If you are not actively using your licence you will still be required to provide your financial information to QBCC annually. You can report that your turnover is $0, but you still need to hold the required Net Tangible Assets to support your licence category.

I only started trading at the end of September - what should I report on?

QBCC is in the process of back-entering accepted financial information through MFR Report submissions from reporting dates of 30 June 2019 and later.  Very shortly, we will advise these licensees that this accepted financial information has complied with their 31 December 2019 annual reporting obligations.

I have to have a QBCC license because I perform annual termite inspections and apply chemical treatments to existing structures.  I don't use subbies just work alone. The majority of my activity is general pest work and is not applicable to QBCC. Income from what activities do you want me to include in construction income?

Revenue for QBCC purposes includes the total income you receive from the building industry and any other source including outside Queensland and overseas, but excludes wages, salary and GST.

Is it true that you won't accept financial information more than four months old?  If so, won't our June financials be out of date?

The annual reporting should be prepared for your last financial year.  There is no age limit on the annual reporting information.  The four-month rule applies to MFR Report, which is a separate requirement to annual reporting.

 

Sorry bit confusing, is a nominee supervisor license required to submit?

The following licensees and applicants do not have to meet any MFR obligations:

  • Nominee supervisor
  • Site supervisor
  • Occupational licensees.

After you enter the financial information and before submitting - will it show what the actual NTA, Current Ratio and MR figures are?

No, but you will receive a confirmation email on successful lodgement of the form.

If you trade as a trust but the licence is held in the personal name as you cant hold it in the trust, do you report personal assets and liabilities of both the trust and personal?

For annual reporting purposes, we require the financial information to be submitted on the trust structure, as it is the trading entity.
In relation to meeting MFR (as separate to annual reporting), QBCC will discuss requirements with the licensee about meeting the NTA as a trustee. 

Termite management chemical - are the inspections of buildings regarded as construction work for the purpose of reporting the income? Does the building income only apply to what we do as pre-construction termite barrier installation? Termite management has a PI requirement. Other classes with a PI requirement don't have a reporting requirement. Do we still have to report?

Revenue for QBCC purposes includes the total income you receive from the building industry and any other source including outside Queensland and overseas, but excludes wages, salary and GST.

Can you please confirm that trades retentions prior to project PC should (or could) be put into the tradecontractors WIP versus on their debtors ledger,which would have the 180 day (50% reduction) and 365 day (100% reduction) rules applied?

Work in progress, debtors and retentions are all different (but all acceptable) assets.  Work in progress is an amount not yet claimed for work done on a project.  A debtor is an amount already invoiced for work done on a project. Retention is an amount set aside for assurances of work done on a project.

The figures I put in for assets, are they based on the value of them today?

The assets are based on the reporting year-end you use. For example, if 30 June 2019 is your most recent financial year, the assets would be based on their values as at 30 June 2019.

Are the numbers as of 30 June 2019?

The financial information lodged for annual reporting should be for your most recent financial year (i.e 30 June 2019 for most licensees).

How does it work if the licence is connected to a sole trader ABN but it has been operating as a trust?

For annual reporting purposes, we require the financial information to be submitted on the trust structure, as it is the trading entity.
In relation to meeting MFR (as separate to annual reporting), QBCC will discuss requirements with the licensee about meeting the NTA as a trustee. 

I have a carpentry licence as well as builder low rise under the same number, only doing contract carpentry at the moment, what am I reporting on?

Revenue for QBCC purposes includes the total income you receive from the building industry and any other source including outside Queensland and overseas, but excludes wages, salary and GST.

I'm not currently trading in Queensland but want to keep my licence for the event that we move back in the next few years do I need to supply my interstate relevant financial details?

Revenue for QBCC purposes includes income from all sources, only excluding

  • amounts received as salary or wages, or
  • an amount received for GST payable by your business. 

If you are not actively using your licence you will still be required to provide your financial information to QBCC annually. You can report that your turnover is $0, but you still need to hold the required Net Tangible Assets to support your licence category.

I hold a low rise license but work on salary for another builder. Does my wage form part of my turnover?

No. Revenue for QBCC purposes includes income from all sources, only excluding:

  • amounts received as salary or wages, or
  • an amount received for GST payable by your business. 

How do we report the financial information for a trust?

The information required would be based on the trading entity, so if you trade through the trust, it would just be the trust information required.

What assets and liabilities are to be reported for trustee as the trading entity? Where do we report the deed of covenant? How is the covenantor's financial position reported using the myQBCC online account?

The information required would be based on the trading entity, so if you trade through the trust, it would just be the trust information required.
The Deed of Covenant and Assurance is required when completing a MFR Report, and is not relevant for annual reporting purposes.

Does total revenue essentially mean total turnover?

Yes, it does.  Total income/revenue/turnover.

If the licensee trades as a partnership but has a rental property owned with their spouse outside of the partnership, is it 100% the assets and liabilites of the partnership that are included in the annual reporting form?  Are the rental property assets and liabilities included in the annual reporting form? If so, is it the full amount or just the licensee's share?

The information required would be based on the trading entity, so if you trade through a partnership, it would just be the partnership information required.

If the next 12 months of loan repayments are included in current liabilities,what happens where insurance premiums are paid monthly?  Do the next 12 months of payments need to be included as current liabilities?

A current liability is an amount owing by you to someone else that you expect to pay within the next 12 months.

If I'm a sole trader and have an 18-month residental rental lease,are the next 12 months of rent payments to be included as a current liability?

A current liability is an amount owing by you to someone else that you expect to pay within the next 12 months. This includes the proportion of loans, mortgage repayments, finance leases etc to be paid within the next 12 months.

My accountant prepares my financial statements for tax purposes. Therefore, my plant and equipment and motor vehicle assets are being depreciated per tax depreciation rates.  Thus, my assets shown on my balance sheet are less than the market value?  Do I need to revalue my assets to reflect my actual Tangible Asset Value?  If so, how?

The information provided for annual reporting purposes can be based solely on your internal management accounts which do not have accounting standards applied.  Depreciation and revaluations are accounting concepts, and would only apply if a licensee chose to provide signed financial statements (which are not required or mandatory for annual reporting purposes).

We hold a QBCC licence, but do not work in the construction industry, we are a pest control company, but we have to do this?  We have our own professional indemnity insurance, so do we need to do this?

Yes, licensees that hold a contractor or builder grade of licence will be required to submit financial information. 

You have 12 months to fix your NTA but do you also have 12 months to fix your current ratio if don't pass that at 31 December2019?

Yes.  If your QBCC-approved turnover is less than $30 million per year, over the next year (until at least 31 December 2020) we can help you understand the annual financial requirements to strengthen your business.

Do I take current assets/liabilities off assets/liabilities when entering the information?

No, the formulas built into myQBCC portal will do this automatically when you lodge the information.

For a company, can assets of directors be included in the NTA calculation?

No, a director's assets are legally owned by the director, and not by the company.  If a company wants to include a director's assets to increase its own net tangible assets, this would be through a MFR Report and a Deed of  Covenant and Assurance (this is not relevant for annual reporting purposes).

If you have a company and a personal licence do you have to complete MFR for both entity?

An MFR Report is not required for annual reporting purposes. 
All licensees who hold contractor licences are required to submit information for annual reporting purposes. If you do not trade through your personal licence, your personal revenue would just be nil. You could also consider downgrading your personal licence to a nominee supervisor licence.

I am doing pre-purchase building inspections only and I have a low rise builder licence and a company licence. The company has another business not construction-related. I do not do any construction work. I hold professional indemnity insurance more than $500,000 for the pre-purchase building inspections. Do I need to lodge the annual report?

If you hold a personal contractor licence in Builder – Low Rise, and a company licence, you would need to provide financial information for annual reporting for both yourself and the company. 

Licensees and applicants in the following classes, with valid professional indemnity insurance, may not have to meet the minimum financial requirements in certain circumstances unless they hold a licence in another class. 

Licence classes:

 

  • Builder Project Management Services
  • Building Design – Low Rise
  • Building Design – Medium Rise
  • Building Design – Open
  • Hydraulic Services Design
  • Hydraulic Services Design (excluding
  • design of on-site domestic waste water management)
  • Site Classifier
  • Site Classifier (excluding on-site domestic waste management).

We run a painting and building company under same licence so two separate reports? And also are we meant to combine the revenue?

Revenue for QBCC purposes for the licensed entity includes the total income you receive from the building industry and any other source including outside Queensland and overseas, but excludes wages, salary and GST.

if your accountant submits a MFR Report do you still need to submit an annual report?

QBCC is in the process of back-entering accepted financial information through MFR Report submissions from reporting dates of 30 June 2019 and later. 

We have changed our business structure from a company to a sole trader.  Our sole trader books have only started since 1 July 2019 so our end of financial year reporting will be 30 June 2019.  Is this an issue?. If your licenced entity only started trading as at 1 July 2019 due to a change in business structure and you therefore will not have end of financial reports until 30 June 2020, do you enter financials as at the year to date?

QBCC is in the process of back-entering accepted financial information through MFR Report submissions from reporting dates of 30 June 2019 and later.
If your licence was approved based on financial information earlier than 30 June 2019, you would need to provide financial information for annual reporting purposes based on your most recent reporting or financial year, which is likely to be 30 June 2019.

What are non current assets?

A non-current asset, also known as a long-term asset, is expected to be held for more than a year before being converted to cash.

If you want to change from Category 1 to SC1 or SC2, is there another procedure?

You would need to submit a MFR Self Certifying Category 1 or MFR Self Certifying Category 2 form, and provide a recent balance sheet and profit & loss statement. This is a separate process to annual reporting submissions.

The business is set up as a partnership however licence is held in my husband's name only. How do we report?

The information required would be based on the trading entity, so if you trade through a partnership as well as trade personally, it would be the combination of both.  If you only trade through the partnership, it would just be the partnership information required.

I hold both NSW and Queensland licences and operate as a sole trader currently all my work is in NSW. Do I report this information given that my Queensland income is nil?

Revenue for QBCC purposes includes the total income you receive from the building industry and any other source including outside Queensland and overseas, but excludes wages, salary and GST.

Will this be something we need to do each year?

Yes, licensees who hold contractor licences will be required to provide annual reporting information once each year from 2020.  We will advise you of your annual reporting day for 2020 in the near future.

Other income: would this include income if employed fulltime outside of the industry?

Revenue for QBCC purposes includes the total income you receive from the building industry and any other source including outside Queensland and overseas, but excludes wages, salary and GST.

My husband is a sole trader running a building services business and he holds a low rise builder licence. In the business, he also installs blinds and curtains for clients, can this revenue can be included into the construction revenue or should be classified as other revenue? He only has one ABN.

The non-construction work would be classed as other revenue.

What do you do if you have a family trust?

The information required would be based on the trading entity, so if you trade through the trust, it would just be the trust information required.

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