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.
