Service Charges - Budget v Accounts

Each year, within six months of the end of the Service Charge year, accounts are prepared and certified or audited by an independent accountant.

Whilst the Budget shows the anticipated spend for the coming year, the Accounts show what was actually spent during that year. Each individual item on the budget will show the corresponding actual spend in the accounts and the variance, if any, between them. When totalled, the variances will show either a surplus on the accounts, where the actual amount spent during the year was less than the Budget set at the start of the year, or a deficit, where the spend was more than that anticipated in the Budget.

The final certified or audited accounts are distributed to all owners, together with an explanation of any significant variance.

On the next Service Charge invoice following the issue of the final accounts a “Balancing Figure” will usually appear. This is your share of the variance on the accounts. It is calculated in exactly the same way as your usual service charge. If the accounts show a surplus you will have a credit on your invoice. If the accounts show a deficit you will have an additional charge.

Sometimes, if permitted by the lease or deeds and if the client so instructs, a surplus may instead be held back and credited to the Reserve Funds, or a deficit taken from Reserve Funds.

For a Summary of your Legal Rights and Obligations concerning Service Charges click here.