John Mills, ARMA's Technical Officer, updated delegates at ARMA’s 13th Conference on 2nd October 2008 on a potential change in the handling of, and accounting for, leaseholders service charge funds to be introduced in 2009.

Mr Mills pointed out that the Government will be announcing that all Residents’ Management Companies (RMC) will be required to produce annual statements of account for the service charges funds in a prescribed content which is required to be passed to lessees within 6 months of year end.

These statements of service charge accounts will also be required to be checked by an independent accountant.

In all except a few cases, all service charges funds will have to be held in a separate designated trust bank accounts for each property and kept separate from any other income belonging to RMC’s.

An impact of these changes is that service charge income and expenditure should not be included in the RMC's statement of account being provided to Companies House.

ARMA and the Institute of Chartered Accountants have recently issued guidance confirming that this is the correct approach to RMC accounts.

ARMA is being consulted on the change in accounting regulation.

Commencement is expected 1st April or 1st October 2009. For further details see http://www.arma.org.uk/files/LAN08%20RMC%20Accounts.pdf

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