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Accountants for new care businesses: the financial leg of CQC registration.

CQC registration is the gateway to operating a regulated care business in England. The application includes a financial leg that most new providers underestimate: financial information about the proposed provider, a financial viability statement prepared on <a href="https://www.cqc.org.uk/guidance-regulation/providers/registration/supporting-documents-provider/document/financial-viability-template">CQC's own template</a>, and forward projections that demonstrate the service can be run sustainably. We handle the money paperwork. We do not submit the application or provide compliance consulting; that is the role of a CQC registration consultant. We do the financial half.

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£10,500
Maximum Employment Allowance available against employer NIC for eligible care employers in 2026-27
£50,000
MTD for Income Tax threshold from 6 April 2026 for sole-trader care operators held personally
£10,500
Employment Allowance available from 2026-27 to offset employer NIC for new care providers

What makes care startups finance different.

The financial leg of CQC registration

<a href="https://www.cqc.org.uk/guidance-providers/registration">CQC registration is mandatory before providing regulated activities</a>. Trading before registration is a criminal offence under the Health and Social Care Act 2008. The application requires financial information about the proposed provider, and new providers must submit a financial viability statement using <a href="https://www.cqc.org.uk/guidance-regulation/providers/registration/supporting-documents-provider/document/financial-viability-template">CQC's own template</a>. This is the document that most new providers struggle with, because it requires forward projections, funding assumptions and a demonstration that the business model is financially sound, expressed in a format the regulator specifies.

Projections and break-even for the first year

A credible financial viability statement needs a model behind it: what the fee income looks like at different occupancy levels, what the staffing cost is at full rota, what the break-even occupancy is, and how the first six months are funded before placements or local authority contracts produce regular income. New domiciliary agencies face the same challenge: the first weeks of trading carry full payroll cost against contracted-care-hour volumes that build gradually. The projections need to be honest and defensible, not optimistic.

Choosing the right structure from the outset

Operating as a sole trader is simpler at launch but creates personal liability and, above £50,000 of combined self-employment and property income, brings <a href="https://www.gov.uk/guidance/check-if-youre-eligible-for-making-tax-digital-for-income-tax">MTD for Income Tax obligations from 6 April 2026</a> (dropping to £30,000 from 6 April 2027). A limited company separates personal and business liability, allows owner extraction through salary plus dividends at the <a href="https://www.gov.uk/tax-on-dividends">rates from 6 April 2026</a>, and is taxed at the <a href="https://www.gov.uk/corporation-tax-rates">19%/25% corporation tax rates</a>. The right choice depends on the projected profit level, the owner's other income and whether CQC will require the company to be the registered provider.

First-year payroll and VAT set-up

From the date CQC registration is approved (not the date of application), the provider is a state-regulated welfare supplier and its care fees are <a href="https://www.gov.uk/guidance/welfare-services-and-goods-notice-7012">VAT-exempt</a>. That means input VAT on care-delivery costs is unrecoverable from the start. On the payroll side, employer NIC at 15% above the <a href="https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2025-to-2026">£5,000 secondary threshold</a> begins with the first employee. The <a href="https://www.gov.uk/claim-employment-allowance">Employment Allowance of up to £10,500</a> can offset the bill from day one if correctly claimed.

How we help care startups.

CQC financial viability statement and registration finance

We prepare the financial viability statement on <a href="https://www.cqc.org.uk/guidance-regulation/providers/registration/supporting-documents-provider/document/financial-viability-template">CQC's template</a>, with the forward projections and funding assumptions behind it. We do not handle the CQC application or compliance documentation; a CQC registration consultant does that work. We produce the financial leg: the FVS, the cash-flow forecast, the break-even model and the first-year accounts structure. See our <a href="/services/cqc-financial-viability-statement">CQC financial viability statement service</a>.

Structure, owner extraction and tax planning

We advise on sole trader versus limited company, model the corporation tax and dividend outcome against <a href="https://www.gov.uk/corporation-tax-rates">the 19%/25% CT rates</a> and <a href="https://www.gov.uk/tax-on-dividends">dividend rates from 6 April 2026</a>, and flag the MTD-IT obligations that apply to sole-trader operators above £50,000. For domiciliary agency start-ups, see <a href="/for/domiciliary-care">our domiciliary care hub</a> and <a href="/services/start-a-domiciliary-care-agency">start a domiciliary care agency</a>.

First-year set-up: payroll, VAT and bookkeeping

We set up payroll with employer NIC correctly modelled, Employment Allowance claimed from day one, and the VAT position documented from the date of CQC registration approval. We also advise on bookkeeping structure so the accounts distinguish fee-payer categories (LA, NHS, self-funder) from the outset. Use the <a href="/calculators/true-cost-care-hour-calculator">true-cost-per-hour calculator</a> and <a href="/calculators/funded-nursing-care-fee-mix-calculator">fee-mix calculator</a> to model your plan before launch. See our <a href="/services/care-payroll">care payroll service</a> and <a href="/services/care-vat-review">care VAT review</a>.

Common questions

Do I need an accountant to register a care business with the CQC?
Not to submit the application, but the financial leg of the application requires a financial viability statement on <a href="https://www.cqc.org.uk/guidance-regulation/providers/registration/supporting-documents-provider/document/financial-viability-template">CQC's own template</a>, normally prepared or validated by an accountant. The FVS requires forward projections and funding assumptions that go beyond most new providers' accounting experience. We prepare the financial documents; a CQC registration consultant handles the compliance application.
What is a CQC financial viability statement and who prepares it?
<a href="https://www.cqc.org.uk/guidance-providers/registration">CQC's registration process</a> requires new providers to demonstrate that the business is financially viable before regulated activities begin. The financial viability statement, prepared on <a href="https://www.cqc.org.uk/guidance-regulation/providers/registration/supporting-documents-provider/document/financial-viability-template">CQC's template</a>, sets out the financial information about the provider, the funding model and the forward projections. It is typically prepared or signed by an accountant acting for the new provider.
Should I set up as a sole trader or a limited company?
A limited company separates personal and business liability and allows owner extraction through salary plus dividends at the <a href="https://www.gov.uk/tax-on-dividends">rates from 6 April 2026</a>, taxed at the <a href="https://www.gov.uk/corporation-tax-rates">19%/25% corporation tax rates</a>. A sole trader is simpler at launch but above £50,000 of combined income triggers <a href="https://www.gov.uk/guidance/check-if-youre-eligible-for-making-tax-digital-for-income-tax">MTD for Income Tax from 6 April 2026</a>. The right structure depends on projected profit, other income and the CQC application requirements for the registered provider entity.
How much does CQC registration cost?
CQC charges registration fees, but the fee amounts are not fixed in our published figures. Check <a href="https://www.cqc.org.uk/guidance-providers/registration">CQC's registration guidance</a> directly for current fee levels. Note: registration fees are separate from the cost of preparing the financial viability statement and projections.
What financial information does the CQC registration application need?
<a href="https://www.cqc.org.uk/guidance-providers/registration">CQC's registration application</a> requires financial information about the proposed provider, including a financial viability statement on <a href="https://www.cqc.org.uk/guidance-regulation/providers/registration/supporting-documents-provider/document/financial-viability-template">CQC's template</a>. This covers the provider's financial position, funding sources, forward projections and evidence that the service can be sustained. We prepare these documents as a standalone engagement or as part of a broader start-up accounting package.
What do I need to start a domiciliary care agency financially?
Before the first client, you need CQC registration (including the financial viability statement), a payroll structure with employer NIC correctly modelled from 1 April 2026 rates, and bookkeeping that will separate care-delivery hours from travel time and sleep-in shifts for NMW compliance. Model the true cost per care hour before setting your charge rates. See our <a href="/for/domiciliary-care">domiciliary care hub</a> and <a href="/services/start-a-domiciliary-care-agency">start a domiciliary care agency service</a>.

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