Running a domiciliary care agency is hard enough without having to wrestle with your own books. That’s why UK care providers choose specialist domiciliary care accountants instead of a general practice. Apex Accountants and Tax Advisors work with care sector clients across England, Scotland and Wales. We know CQC compliance. We know local authority contracts. We know how a workforce paid by the hour, the visit or the mile actually gets costed. Sole trader, partnership or multi-branch limited company—we build your accounts, taxes and payroll around how domiciliary care really works.

The UK Domiciliary Care Market at a Glance

The sector isn’t standing still, and neither is the money moving through it. Local authorities are paying more for home care each year: the average fee paid to external home care providers reached £24.00 per contact hour in 2024 to 2025, a 6.5% rise on the year before. That’s good news for revenue. It isn’t automatically good news for margin, because staff costs are rising just as fast.

Growth brings competition. It also brings scrutiny from the CQC, from the HMRC, and from local authorities re-tendering contracts on tighter budgets. A domiciliary care accountant who tracks where council rates and staff costs are heading, not just where they’ve been, is worth more than a general practice can offer.

Why Domiciliary Care Providers Need a Specialist Accountant

Domiciliary care runs on thin margins. Cash flow is tight. Compliance is heavy. Here’s what makes the sector different:

• Local authorities and NHS commissioners often pay on 30- to 60-day terms. Wages go out weekly.
• The National Living Wage rose to £12.71 an hour from April 2026. Employer National Insurance sits at 15%, with the threshold down to £5,000 since April 2025.
• Travel time between calls counts as working time for the National Living Wage. Miss this and you’re underpaying staff without knowing it.
• Welfare services delivered by a state-regulated domiciliary care agency are usually VAT-exempt — but not always, and getting it wrong is expensive.
• CQC expects clean, audit-ready financial evidence, not just a tax return once a year.

A general accountant can file your accounts. A sector specialist can tell you why your margin is slipping before it shows up in the bank balance.

How Our Domiciliary Care Accountants Help

We build management accounts around what actually drives your margin: cost per care hour, staff utilisation, and your split between local authority and private-pay clients. We run payroll for zero-hours and guaranteed-hours contracts, check your averaged minimum wage rate on every run, and handle pension auto-enrolment. We also check whether you’re claiming Employment Allowance — the allowance rose to £10,500 a year and the old £100,000 eligibility cap was removed from April 2025, and it’s often missed by smaller care agencies. When you go to the local authority for a fee uplift, we hand you a cost model that makes the case for you.

Funding, Fees and Cash Flow in Domiciliary Care

Not all care hours are funded the same way. A client book can span local authority adult social care, NHS Continuing Healthcare, NHS-funded nursing care, and private direct payments, often within the same rota. Each funding stream has its own invoicing cycle and payment terms, and council fee uplifts don’t always keep pace with rising costs, even as average home care fees rise nationally.

Keeping track of who owes what, and when, is a job in itself. We build that visibility into your monthly reporting, so nothing slips through. When it’s time to ask a commissioner for more, you’ve got the numbers ready.

Domiciliary Care Accounting and Tax Services

Good domiciliary care accounting covers a lot more than year-end accounts. Our services include:

• Monthly bookkeeping and management accounts built around care-sector KPIs
• Payroll, pensions auto-enrolment and mileage schemes for care staff
• VAT advice, including partial exemption reviews for mixed care services
• Statutory year-end accounts and corporation tax planning
• Cash flow forecasting and support with local authority fee negotiations
• Employment Allowance and employer National Insurance reliefs
• Business structuring: sole trader, partnership or limited company
• Support with CQC financial viability requirements and funding applications
• Growth, acquisition and exit planning

Since Making Tax Digital for Income Tax became mandatory from April 2026 for sole traders and landlords earning over £50,000 (falling to £30,000 from April 2027), many care providers can no longer rely on spreadsheets and manual records. That regulatory push is one reason that owners of care homes increasingly choose accountants for domiciliary care who already know the sector’s payroll, invoicing and compliance needs, rather than a general practice learning as they go.

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Specialist Tax Advisors for Domiciliary Care Agencies

As tax advisors for domiciliary care businesses, we focus on how you extract profit efficiently, how vehicle costs for home visits are claimed, and how corporation tax is planned around growth. We handle personal tax for directors and owners too. And if you’re weighing up a sale or a handover to your staff team, we can set up an Employee Ownership Trust as an exit route.

Sector consolidation is picking up. Larger groups and private-equity-backed platforms are actively buying well-run agencies, particularly those with clean financials and low reliance on local authority fees. If a sale is on your horizon, tidy management accounts and a clear cost-per-hour picture make you a more attractive, and more valuable, target.

Staffing Costs and Workforce Compliance

Staffing is where domiciliary care margins are won or lost. Recruitment and retention remain some of the toughest ongoing challenges in the sector — every carer lost to turnover means recruitment costs, training costs, and a rota under strain.

Pay compliance adds another layer. Time spent travelling between calls counts as working time for the National Living Wage – home-to-work commuting doesn’t, but travel between appointments does. Averaging pay across a shift can quietly dip below the legal minimum if travel time isn’t captured properly.

The new Fair Work Agency launched on 7 April 2026 to bring enforcement of the National Minimum Wage and other worker protections under one roof. HMRC continues to run day-to-day minimum wage enforcement during the transition, with full handover due in April 2027, so this remains an active enforcement area.

We build payroll checks around this from day one. That way you’re not finding out about an underpayment years later, backdated, with penalties attached.

Why Choose Apex Accountants and Tax Advisors

We only work with care and health sector clients. We’ve seen the funding models, the CQC inspection cycles, and the staffing headaches most general accountants only read about. We work on Xero and QuickBooks, so you see live numbers, not a report that’s three months old. You get one named accountant, not a call centre queue. When you’re comparing accountants for domiciliary care providers, that difference is reflected in your bottom line.

Frequently Asked Questions

Do domiciliary care agencies have to charge VAT? 

Usually not on core welfare services, provided you’re CQC-registered. HMRC treats a state-regulated domiciliary care agency’s supply of care assistants directly to patients as an exempt welfare service. Domestic tasks like cleaning or laundry don’t qualify for the exemption, and if you’re supplying staff to another provider rather than delivering the regulated care yourself, VAT may still apply. This is one of the areas we see go wrong most often in domiciliary care accounting, so get it checked rather than assumed.

Does travel time between calls count towards minimum wage? 

Yes. Time spent travelling between clients, waiting, and on handovers counts as working time for the National Living Wage – ordinary home-to-work commuting doesn’t. The Fair Work Agency took on responsibility for pay-related enforcement from 7 April 2026, though HMRC continues to deliver day-to-day National Minimum Wage enforcement until the full handover in April 2027.

How does Making Tax Digital affect my care business?

If you’re a sole trader or landlord earning over £50,000, MTD for income tax became mandatory from April 2026. The threshold drops to £30,000 from April 2027. Partnerships aren’t included yet, but that’s expected to change in a future phase.

Is my agency claiming all the National Insurance relief it’s entitled to? 

Possibly not. Employment Allowance can cut your employer National Insurance bill by up to £10,500 a year, and the old £100,000 NIC cap on eligibility was removed from April 2025. Plenty of smaller care agencies haven’t checked.

Can you help us negotiate higher fees with the local authority?

Yes. We build a cost-of-delivery model from your actual staff costs, mileage and overheads, so your fee uplift request is backed by evidence rather than goodwill.

Should we be a sole trader or a limited company?

It depends on your income, growth plans and appetite for risk. We model both and show you the real tax difference, not just the theory, including as tax advisors for domiciliary care owners weighing up incorporation for the first time.