The budget is how leaseholders see what they are being asked to pay for. A good one is built from last year's actuals, adjusted for known changes, and shared in draft before the year starts. Doing this well prevents half the disputes that end up at tribunal.
Enter your building basics, paste last year's costs (from your bank statements or prior accounts), and we will assemble a draft budget with statutory inspection lines pre-filled, Section 20 triggers flagged, and a copy-ready export.
Used for per-leaseholder calculations and the draft email circulation. Stored locally in your browser; we do not send this anywhere.
The lease determines when budgets must be circulated, the leaseholder share percentages each demand splits across, and whether leaseholder consultation is required before finalising. LEASE-iQ extracts these clauses from your lease in 30 seconds so the budget you build is compliant from line one.
Try LEASE-iQ free → See user guideCopy and paste from your bank statement, accountant's report, or previous service charge accounts. Any format works as long as each line has a description and a pound amount. We will auto-categorise each line against the statutory compliance categories.
Have nothing to paste? Use the starter button to populate a sensible 16-flat block budget. You can then edit any line and use the per-line estimator in Step 3 to refine.
Tip: pound signs and commas are handled. We match descriptions against keywords from the Building Trust compliance audit. Unrecognised lines are put into a "Needs category" group you can fix by hand.
The table below is editable. Adjust amounts, categories, or delete lines. The "Statutory inspections" group is pre-populated with items that are typically due each year; keep or remove depending on which are scheduled for your next financial year.
Paste costs above and click "Auto-categorise" to populate the budget.
Below are statutory and operational categories not yet in your budget. For each, answer 1-2 simple questions to generate a defensible estimate with reasoning. The reasoning is saved with the line so leaseholders can see how the number was reached.
Generate a formatted budget ready to circulate with a leaseholder draft email, copy as CSV to paste into a spreadsheet, or print to PDF via your browser.
About this tool. Everything runs in your browser. No data is sent to any server. Your building profile is stored in localStorage (cleared when you clear browser data). This is the manual equivalent of what BLOCK-iQ does automatically: reads your records, categorises them, flags Section 20 triggers, and produces a compliant output.
All figures are indicative ranges based on published rates checked April–May 2026. The defaults the Estimator uses are mid-range — always compare three written quotes for your specific building.
A transparent budget cuts disputes, builds trust, and flags Section 20 triggers before they become urgent. The effort is mostly copying last year's actuals and updating known changes.
If directors prepare it, no cost. If your managing agent prepares it, it is part of their annual service (or a small extra). The value is in the process, not the spend.
Of director or agent time to produce a draft, build each line with its source, and format the output. Double that if you are starting from scratch with no template.
Year-end. Share in draft 30 to 60 days before the new year starts, invite comment for 2 weeks, finalise, issue with the first demand of the new year.
What a good service charge budget includes. Income: estimated service charge contributions by leaseholder share. Expenditure grouped by category: repairs and maintenance, buildings insurance, management fee, communal utilities, gardening and cleaning, statutory inspections (FRA, EICR, asbestos, gas safety, H&S risk assessment), professional fees (accountant, surveyor, legal), reserve fund contribution, contingency. Notes citing the source of each figure and flagging any Section 20-triggering line. Ground rent is not part of the service charge budget; it is a separate obligation paid to the freeholder under the lease, demanded under Section 166 of the Commonhold and Leasehold Reform Act 2002. Company running costs (RMC/RTM administration: AGM, Companies House, D&O insurance) are usually recovered through the management or administration line within the service charge if the lease permits, otherwise via a director fee or absorbed by the company.
Pick the one that matches you.
Common in small self-managed blocks or newly-formed RTMs. Service charges are demanded without a formal budget, often based on last year's total divided by the shares.
What to do. Use the checklist template below. Pull last year's actual expenditure from the accounts (or bank statements if no accounts). Add lines for statutory inspections due in the coming year. Add a reserve fund contribution of 10 to 20% of expenditure. Circulate in draft to leaseholders 30 days before year-end. Finalise and issue with the first demand.
Agent or directors produce a budget internally and base demands on it, but leaseholders never see the source document. Demands show the total but not the breakdown.
Actual spending is coming in far above or below budget, and leaseholders are questioning the credibility of the process. This is a governance credibility issue.
Paste into a spreadsheet. Fill each line with a pound figure and a source. Anything over the Section 20 threshold per leaseholder gets flagged for consultation before the year starts.
A budget that leaseholders have seen and commented on is much harder to challenge later. The effort is low and the dispute-reduction is real.
Attach the budget PDF. Set a clear comment deadline. Two-week window is enough.
The budget is not the recovery mechanism. Demands are. But the budget drives how demands land.
Once approved, the budget is divided by quarterly or half-yearly demands per the lease. Each demand references the budget and the leaseholder's share. The Section 21B summary of rights accompanies every demand. At year-end, actuals reconcile against budget in the certified accounts.
Any line over the Section 20 threshold (£250 per leaseholder for works, £100 per leaseholder per year for long-term agreements) must be consulted on before the money can be recovered above that threshold. Building consultation into the budget timeline means: identify the triggering item, issue Stage 1 Notice of Intention 60 to 90 days before you need to instruct, complete both stages, then instruct. See the Section 20 page.
Reserve fund contributions are built up over time to fund major works. Under Section 42 LTA 1987, reserve monies are held on trust for leaseholders. Check the lease for any specific reserve provisions. Good practice is a Reserve Fund Plan from a RICS surveyor every 5 to 10 years, setting a target balance.
If actuals come in below budget, check the lease: surplus may need to be returned, credited, or retained. If above budget, issue a balancing demand (with Section 21B) or roll the deficit forward. Either way, explain the variance to leaseholders in writing at the AGM and in the accounts.
These answers are extracted so search engines and AI assistants can cite them directly.
"Building Trust is built by Adam Street, a director of Hafer Road Flats Limited (16-flat SoF in Battersea). Every page reflects what we do at HRFL or wish we had been told sooner. The fee benchmarks calibrate against real building data."
Read the Hafer Road case study →Verify any specific section at legislation.gov.uk before acting on it. Last legal check: 26 April 2026.
Section 19 LTA 1985 (reasonableness of service charge costs): legislation.gov.uk
Section 20 LTA 1985 (consultation for qualifying works over £250 per leaseholder): legislation.gov.uk
Section 20ZA LTA 1985 (Qualifying Long-Term Agreements): legislation.gov.uk
Section 21B LTA 1985 (summary of rights and obligations served with every demand): legislation.gov.uk
Schedule 2, Service Charges (Consultation Requirements) (England) Regulations 2003 (annual contracts excluded from QLTA): legislation.gov.uk
Gas Safety (Installation and Use) Regulations 1998 (annual CP12 inspection): legislation.gov.uk
Electricity at Work Regulations 1989 (EICR / 5-year inspection cycle): legislation.gov.uk
Control of Asbestos Regulations 2012, regulation 4 (duty to manage asbestos in non-domestic premises): legislation.gov.uk
Management of Health and Safety at Work Regulations 1999, regulation 3 (annual H&S risk assessment): legislation.gov.uk
Lifting Operations and Lifting Equipment Regulations 1998 (LOLER) (lift thorough examination every 6 months for passenger lifts): legislation.gov.uk
Companies Act 2006 (annual confirmation statement and accounts for the freehold or RTM company): legislation.gov.uk
Building Safety Act 2022 (higher-risk buildings, applies to most blocks over 18m): legislation.gov.uk
Non-statutory standards referenced:
BS 7671:2018+A2:2022 (IET Wiring Regulations, the standard EICRs are tested against): IET
HSG 274 Part 2 (HSE Legionella guidance for hot and cold water systems): hse.gov.uk
RICS Service Charge Residential Management Code (4th edition, 2020): rics.org
BLOCK-iQ generates next year's draft budget from this year's actuals, flags Section 20-triggering lines with consultation timing, and tracks actual spending against budget quarterly. Variance alerts fire at 10% deviation so you find out early.