Block Property Management accounting

[Marleypotts]

Hi all

I am about to open up a block property management company as have been asked to take over the property management for a few properties.

However, I have a few queries which i would like confirming before i set up.

VAT -

1. If i become VAT registered from day 1, do i charge VAT and declare VAT on the full amount of the service charge I receive and then reclaim VAT on everything that is spent on each property, or do I charge VAT on the management fee only and reclaim vat on everything I spend (VATABLE) with regard to my company only?

ACCOUNTING AND TAX -

2. When i estimate the amount of fees to charge with regard to internal and external cleaning, if I over estimate the amount and end up not spending as much, am I liable for tax on the over estimated amount or am I liable to repay that amount to the leaseholders?

SINKING AND RESERVE FUND -

3. It is common for companies to charge for a reserve and sinking fund incase of any major works or any additonal works that were not forseen. This technically is not my income and I believe should be shown as prepaid income creditor on the balance sheet. However, what happens when I take over the management of a property, is the current unused sinking fund then paid to me by the previous management company for me to manage, or is it repaid to the leaseholders who have paid it in?



I greatly appreciate anyones help and advice, as I want to be fully in control of my VAT and other taxation issues from day 1.



Many thanks