To register with the Care Quality Commission, a provider must demonstrate it meets the regulations for its proposed regulated activity. That means a fit-and-proper registered manager, a statement of purpose, suitable premises, and, critically, evidence of financial viability: a statement on CQC's own template, normally prepared by an accountant, proving the service can run safely and sustainably from day one. Trading before registration is a criminal offence under the Health and Social Care Act 2008.
The registration requirements at a glance
The short answer: CQC registration is mandatory before any regulated activity begins, covering personal care, accommodation for persons requiring nursing or personal care, and nursing care. The application has several distinct legs, each with its own evidential burden. No size exemption exists for new providers.
The main requirement categories are:
| Requirement | What it proves | Cost tail | Where to go next |
|---|---|---|---|
| Regulated activity scope | The provider has identified precisely which regulated activities it proposes to carry on | Defines registration scope and fee band | CQC registration guidance |
| Statement of purpose | The service, the activities and the legal entity are accurately described | Drafting time; must be kept current | CQC registration guidance |
| Registered manager | A fit and proper person is designated as the registered manager | Salary line; qualification and DBS costs | See financial modelling below |
| Premises | The environment is suitable for the regulated activity | Fit-out capital; capital allowances soften this (see below) | Capital allowances guide |
| Financial viability | The service is financially capable of operating safely from day one | Accountant preparation; annual CQC fee thereafter | FVS walkthrough |
| Registration fee | Annual CQC fee banded by registered capacity | Per CQC fee scheme (link below) | CQC fee scheme |
Quality and clinical requirements (staffing levels, infection control, safe care and treatment) are also central to CQC's assessment but are outside the financial scope of this page. The focus here is the financial leg: what it requires, what the numbers behind it must show, and what ongoing costs registration creates.
The financial-viability requirement
The short answer: CQC requires a financial viability statement on its own template, normally accountant-prepared, demonstrating that the proposed service has the financial resources to operate safely and sustainably from day one. This is a specific financial submission, not a business plan, and it is a pre-launch gate, not a post-launch filing.
The financial-viability requirement exists because CQC cannot permit a provider to begin regulated activity without some assurance that the business will not collapse financially within months of opening. The consequence of provider failure is disruption to the people receiving care, which is precisely what the regulatory framework is designed to prevent. For new providers, the financial viability statement is the earliest point at which this risk is formally assessed.
What the statement must demonstrate, at a high level, is that the proposed service has:
- sufficient opening capital to sustain the business through the period from launch to break-even
- identified and evidenced funding sources (cash, committed loan facilities, investor capital)
- a cost base modelled on current statutory rates, not estimated or optimistic figures
- a credible cash-flow runway that shows the business surviving to the point where income covers costs
This post maps the financial requirements. For a step-by-step guide to actually producing the FVS, including how to build the cash-flow model and what CQC's template asks for section by section, see the CQC Financial Viability Statement walkthrough.
The numbers behind a viable financial case
The short answer: A financial viability statement is only as strong as the cost model behind it. A model that understates statutory wage costs, ignores employer NIC or assumes unrealistic occupancy from day one will not hold up to scrutiny. Building it from the actual legal floor is both the right approach and the only defensible one.
Staff costs: the dominant line
For most care providers, staffing is 60 to 70 percent of the cost base. The model must start from the correct statutory floor.
- National Living Wage: £12.71 per hour for workers aged 21 and over from 1 April 2026. A model using a lower figure is wrong before it is opened.
- Employer NIC: 15% on earnings above the secondary threshold of £5,000 per year (£96 per week, £417 per month). For a workforce of part-time workers, modelling this per head rather than as a blanket percentage of total payroll is materially more accurate.
- Employment Allowance: up to £10,500 per tax year offsets employer NIC for eligible businesses. For a small operator whose total employer NIC liability is below that figure, the allowance eliminates it entirely in the early period and should be reflected in the opening cash-flow model.
- Holiday accrual: irregular-hours and bank workers accrue at 12.07% of hours worked. This is a real cost that must appear in the wage model, not an afterthought.
Domiciliary agencies: additional cost lines
For a domiciliary care agency, the model has two cost lines that residential providers do not face in the same form:
- Inter-call travel time: travel between a client's home and the next client's home is working time for NMW purposes and must be paid at or above the applicable rate. A model that pays only for face-to-face contact time is building in an unlawful shortfall from the outset. See our full guide to sleep-in pay and travel-time NMW.
- Sleep-in shifts (where applicable): only time actually awake for the purposes of working counts for NMW during a sleep-in shift. Workers permitted to sleep are not entitled to NMW for the sleeping period. The model must reflect this correctly in both directions: awake time paid, sleeping time excluded where sleeping facilities are provided.
Break-even occupancy or hours
The cash-flow model must identify the point at which fee income covers the full cost base. For a care home, this is typically expressed as a minimum occupancy rate; for a domiciliary agency, it is a minimum delivered care-hours figure per week. Both must be stated and supported by the fee rate and cost model that underpin the projection.
A care home that models break-even at 95% occupancy from month one is not credible; most homes take weeks or months to fill beds. The runway must show the business surviving to a realistic occupancy level on the confirmed opening capital.
The recurring cost of being registered
The short answer: CQC registration is not a one-off cost. An annual registration fee applies from the point of registration and every year thereafter. It is a real overhead, banded by the scale of the regulated activity, and it must appear in financial models from year one.
The fee is banded by registered capacity: broadly, by the number of registered places for a care home, or by some measure of service-user capacity for other regulated activities. The current fee-scheme figures are published on CQC's fee-scheme page. Because these figures can be revised, this page does not state a specific amount; the live figure is on that page.
The business-rates position is separate. Most residential care homes are assessed at rateable values well above the Small Business Rate Relief threshold and pay rates in full. Domiciliary agencies with small offices may fall below it. SBRR provides 100% relief below a rateable value of £12,000, tapering to zero at £15,000.
Requirements that carry a cost tail
The short answer: Several registration requirements have financial implications that extend well beyond the registration process itself. Building them into the opening financial model avoids surprises in the first trading year.
The registered manager as a payroll line
A registered manager must be in place from the point of registration. That is a salary line from day one, before any fee income arrives. For a new provider, the registered manager's salary must be in the opening capital calculation and the cash-flow runway. It is not optional and it is not deferred until the service reaches capacity.
Premises and fit-out
Capital spend on care premises and fit-out can be substantially offset through capital allowances, but only if the claims are sequenced correctly and made by the right entity.
- Annual Investment Allowance: up to £1,000,000 per year at 100% on qualifying plant and machinery. For most single-home fit-outs, AIA absorbs the entire plant bill in year one.
- 40% first-year allowance: Finance Act 2026 s.29 introduced a 40% FYA for new, unused main-pool additions beyond the AIA cap.
- Writing-down allowance: Finance Act 2026 s.28 reduced the main-rate WDA to 14% from April 2026 (down from 18%).
- Structures and Buildings Allowance: 3% straight-line per year on qualifying construction costs for new builds and extensions from 29 October 2018.
In a propco/opco structure (one entity owns the building, another operates the care service), allowances attach to the entity that incurs the expenditure. Getting this wrong at the point of fit-out cannot easily be corrected retrospectively. See the full capital-allowances guide for care-home fit-outs for the sequencing and entity-split considerations.
Ongoing compliance evidence
Staying registered requires ongoing demonstration that the conditions of registration continue to be met. For large providers, this includes financial-distress monitoring under CQC's market oversight regime. For all providers, it means the financial model used to secure registration must reflect the actual operating position, not a one-off submission optimised for the application.
Next steps
If you are at the financial-viability stage of the registration process, the two most useful starting points are the CQC financial viability statement service, which covers preparing and validating the FVS submission, and the care start-ups hub, which maps the full pre-registration financial workstream including opening accounts, VAT position and payroll setup.
If you have an existing FVS draft and want it reviewed before submission, or if you are resubmitting after an earlier application was queried, the same service applies. The FVS and the underlying cash-flow model are the foundation for the whole financial structure of the business; getting them right the first time avoids the delay and cost of revision.