News on the Block Guide 2021
Professional status and affiliations
Choosing an accountant who is part of one of the main chartered accountancy bodies (i.e. ICAEW, ICAS or ACCA) is generally considered advisable, and could be something specified in the lease. Membership of such an organisation requires all partners/directors and technical staff to work to certain standards, undergo regular continuing professional development training and for the firm to have appropriate professional indemnity insurance in place. In addition, some firms of accountants who specialise in service charge accounts hold ARMA partners status and employ IRPM qualified staff, allowing them greater insight into the sector and providing access to more specialist training courses etc. Accountancy firms may set even higher internal standards than those set by the main accountancy bodies or be members of an organisation that helps promote higher standards such as the UK200 Group. These sector specific affiliations and voluntary adherence to higher standards are unlikely to be written into a lease but are well worth considering when choosing between accountancy service providers. Also, some types of reports for service charge accounts can only be signed off by a registered auditor, i.e. audit reports and section 21 reports, so make sure you only appoint an appropriately registered firm if one of those is required.
Knowledge and experience
It’s w ell worth calling accountants to discuss their knowledge and experience in the sector. It’s quite easy to list specialist areas of work on a website, but it doesn’t let you know if they currently prepare one set of a particular type of accounts, ten, a hundred or a thousand. Talking to someone who works on those accounts will give you the opportunity to get much greater insight: how many they deal with, do they work with a mixture of self- managed sites and ones managed by agents, do they deal with sites of different sizes, do they deal with sites that are mixed use etc. and how long have they been doing this type of work. They may offer related services that you may also need or may help them to understand the sector better, be that dealing with residential management company or freehold company accounts, dealing with the tax implications of lease extensions or providing accounting related support to people involved in service charge disputes.
Timing and scope
Best practice will be to prepare residential service charge accounts within 6 months of the end of the service charge year. With such a timescale there should be greatly reduced risks of costs incurred in a service charge year being time- barred by the ’18 - month rule’. Some accountants won’t necessar ily be aware of this sort of deadline and may believe they have 9 months after the year end to prepare such accounts, in line with the normal private company filing deadline. Often non specialist firms look to fit in service charge accounts around their c ore work, which can lead to work be unduly delayed, so it’s important when choosing an accountant to make sure they understand when the year end service charge accounts need completing and that they will have the capacity to prepare them at the required time.
Approach and values
The relationship with the accountant preparing the year end service charge accounts will be an important one, especially if you are an agent who deals with a large number of sites. Finding an accountant you can agree an approach with and can get to know well allows
This guide is in partnership with WR Partners
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