If you sit on the board of a management company, or you manage one professionally across several developments, you'll already know the accounting doesn't work like a normal trading business. Most accountants treat it like one anyway. That's usually where things start to go wrong.
I've worked with enough RTM companies, freehold management companies and block managers to know the specific things that need to be right, and the specific things that generalist practices tend to miss.
Service charges aren't your money, and the accounts need to say so
Service charge funds are held on trust for the leaseholders who paid them. They aren't income to the management company in the way a trading receipt is, and they shouldn't be accounted for as if they were. Getting this wrong doesn't just look sloppy on the accounts, it can create real problems at lease renewal, at sale, or if a leaseholder ever asks pointed questions about where their money went. I account for service charge funds the way they're meant to be treated, with a clear, separate record that a leaseholder, a solicitor or a tribunal could follow without difficulty.
VAT on service charges is genuinely complicated, not just fiddly
Whether VAT applies, whether it doesn't, and whether a particular cost can be treated as a disbursement all depend on the specific facts of the arrangement, and HMRC has tightened its scrutiny of this area in recent years. I've written a longer piece on exactly how the VAT treatment works if you want the detail: service charges and VAT for property management companies. If your VAT position hasn't been looked at properly, it's worth a conversation before it becomes HMRC's question rather than yours. My VAT returns service covers exactly this.
Multiple entities need to stay properly separate
It's common for one management company, or one managing agent, to be responsible for several developments, sometimes several freehold or RTM companies, each with its own accounts, its own year end and its own leaseholders to answer to. Mixing those up, even accidentally, even just in how the bookkeeping is filed, creates a mess that takes real time to untangle later and can undermine leaseholders' confidence in how their money is being handled. I keep each entity's figures clean and separate from day one, so year-end accounts and any leaseholder queries can be answered for the right development, every time, without a scramble through shared spreadsheets.
Why this matters to you as a director
As a director of a management company, you're not running the business for profit. You're accountable to leaseholders for money that isn't yours, under legislation that assumes you know what you're doing. An accountant who treats your service charge accounts like a normal set of company accounts isn't protecting you, whatever they charge you for it. I bring genuine experience with the trust accounting, the VAT questions and the multi-entity structure that this sector actually involves, explained in plain terms rather than filed and forgotten.
That's the same discipline I bring to every part of the practice, built around the same five principles I hold myself to. You can read more about that on my method page.
How I work with management companies
Fixed fees, agreed in writing before I start, so there are no surprises for you or for the leaseholders footing the bill. A free, no-pressure discovery call to talk through your structure and how many entities are involved. And if you're already well served elsewhere, I'll tell you so.
Book a call at calendly.com/daneon-dfaccounting or email me directly at daneon@dfaccounting.co.uk.