Are Flat Management Service Charges Taxable? Reply


The rules for service charge accounts are set out in Tech 03/11

Service Charges are designed to pay for management, repairs and maintenance, they are not intended to make a profit and so will not generally incur a tax charge.

If, however, they include Interest or Ground Rent potentially there could be a taxable profit.

Service Charges in accordance with ICAEW Technical Release Note 03/11 are accounted for outside of the company and are a type trust account.

steve@bicknells.net

 

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