Accountants for Care Homes & Social Care —
CQC Compliance, LA Contracts & Staff Cost Management

CQC can request financial information at any time — and providers without up-to-date financial governance documentation struggle to respond promptly. We ensure all CQC clients maintain current financial viability evidence.

Following the Court of Appeal’s ruling in Royal Mencap Society v Tomlinson-Blake, sleep-in shifts do not count as ‘time work’ for National Minimum Wage purposes and NMW does not apply for the sleeping period (unless the worker is awake and required to be active). However, the rules are complex and many providers have compliance uncertainty. We review sleep-in policy for every new care client.

Many care providers use zero-hours workers or agency workers and treat them as self-employed, avoiding employer’s NIC. HMRC has conducted systematic compliance reviews in the care sector. If care workers are genuinely under the direction and control of the provider, they cannot be self-employed — the provider is an employer with PAYE and NIC obligations.

When negotiating fee rates with local authorities, care providers that cannot demonstrate their cost base with detailed financial analysis are at a disadvantage. We prepare fee negotiation cost models — breaking down staff costs, management overheads, CQC registration costs, training and compliance costs per care hour.

CQC’s ‘fit person’ test for registration as a new care provider includes a financial viability assessment. Applicants must provide evidence of sufficient financial resources to operate safely, including: latest accounts (if existing business), cashflow projections, evidence of operating capital, details of any loans or mortgages secured on the care premises, and a business plan. We prepare CQC registration financial packs for new providers and support existing providers in responding to CQC financial queries.

Local authorities fund care placements under three main models: block contracts (a fixed number of bed days or care hours per week, regardless of actual occupancy), spot purchase (individual placement-by-placement commissioning at agreed spot rates), and framework agreements (providers on an approved list available for spot purchase at agreed rates). Each structure has different invoicing, reconciliation and financial reporting requirements.

All care workers above school-leaving age must be paid at least the National Living Wage (NLW) for workers aged 21 and over. NLW rates increase each April — from April 2024, the NLW is £11.44/hour. Workers must be paid for all working time including travel between calls for domiciliary workers, waiting time and any time they are required to be awake on a sleep-in shift. Failure to pay NMW/NLW results in HMRC penalty notices, back-pay obligations and public naming.

NHS Continuing Healthcare is full NHS funding for adults with a primary health need, regardless of where they live. When a care home resident qualifies for CHC funding, the NHS (not the local authority or the individual) funds the full care package at NHS-agreed rates. CHC assessments are complex and funding can be awarded, withdrawn or varied — we help care providers understand and manage the financial implications of CHC status changes.

HMRC has issued clear guidance that most care workers engaged directly by care providers or working consistently for one provider are employees or workers — not genuinely self-employed. The tests for employment status (substitution, control, integration) generally result in care worker status as worker or employee. Providers engaging care workers on purportedly self-employed terms face PAYE and NIC liability on the historical payments. We review care worker engagements and advise on the correct employment status.