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Servicing flats

02 March 2010
Issue: 4245 / Categories: Forum & Feedback
An adviser is responsible for preparing the accounts and returns of several flat management companies. What will be the effect of recent developments in the Landlord and Tenant Act 1987 whereby it is necessary to prepare non-trading limited company accounts and trust accounts in relation to service charges?

We act for about 50 flat management companies. We have always prepared accounts for these limited companies in standard Companies Act format and have spent many years persuading the clients to have their bank interest paid net of tax and have then persuaded HMRC that a corporation tax return is not required as it is in the nature of a mutual trading organisation and any interest is already taxed at source.

It has recently been pointed out to us that there has been a change in the Landlord and Tenant Act which now means we have to prepare non-trading limited company accounts and some kind of trust accounts covering the service charges and that a trust tax return will be required each year. This is complete news to us and will result in a considerable amount of extra work on behalf of...

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