Flat management companies

I have recently had a question from a director of a flat management company that we deal with, and this prompted me to look through Accounting Web and HMRC website on the subject of flat management companies - how to prepare their Accounts and how to tax them?

Our Firm prepares many flat management company Accounts.  We prepare the Accounts with a P&L and Balance Sheet, with Service Charge receipts and expenses going in the P&L.  As for the tax, none earn sufficient interest in order to pay tax and are treated as non-taxable on service charge surplus/deficit as are mutual trading.  Some of these companies have over the years been asked to send Accounts to HMRC, but the reply has always come back "there is no need for this company to prepare a CT600 each year, unless its interest receipts exceed a certain level".

The director's recent question was along the lines of "I have read that my company's Accounts should be prepared as dormant, the bank account and service charges should be treated as a Trust outside of the company, and the company should be preparing Trust tax Returns not corporation tax returns - why aren't we doing this?  Also, separate service charge schedules need to be prepared and added to the Accounts that go to Companies House."

As I said, I have read through Accounting Web and HMRC website and found many articles, but no definitive answers.  As for the Accounts - the Flat Management Company booklet on the Companies House website says that "many companies choose to include the income and expenses in their Accounts".  This implies that there is a choice.  I can't find anything concerning the need for including separate service charge schedules in the Companies House Accounts. HMRC website talks about "if you are within Landlord & Tenant Act then the Trust rules apply", but doesn't really define when you are within LTA.  Also, as I mentioned, HMRC have seen many of our companies' Accounts, but not once have they mentioned the need for Trust Returns.

Can anyone please give me a definitive answer, or point me in the right direction?