How To Become A Self-Employed Carer / Paid Carer (The basics)

Making money

When deciding to become a self-employed carer, paid carer, or set up a care agency, the first step is working out if this is an affordable choice for you. We’d all love to be able to work for nothing but, for most, this simply isn’t a viable option. You need to know whether you will be able to pay the bills.

A good place to start is our Salary Wizard. This will help you look at the number of hours that you need or want to work, and the hourly rate you need to charge to meet your own needs. It can also give a suggestion of which company model may be more financially appropriate for your business.

Remember, when you’re thinking about going it alone, there are other things to consider: if you have a mortgage and you want to change mortgage provider in the future, you will need at least two years of accounts from your business to show you can afford the repayments – this isn’t an issue for someone who is employed. Also, if you’re on benefits currently and thinking about becoming a paid carer, then, as with any job, you’ll need to look at how your benefits could be affected.

If you want further guidance on what you need to think about when setting up your care business, how much to charge and what to budget for, take a look at our Budget Template and Making Your Care Business Pay booklet (this is free for Premium Members).

Which company model is right for me?

When setting up any kind of home care service, you will need to think about the ‘company model’ that is most appropriate for you. Your options are:

• Being employed by the service user
• Being a self employed carer (sole trader)
• Setting up a limited company
• Forming some sort of partnership

If you’re employed by the service user, then it’s pretty much the same as being employed by any other organisation. The difference is that your employer may not be quite so experienced in recruiting and managing staff. Have a look at our article on being employed by the service user for more information

The other three options need careful consideration and often you’ll need to seek professional advice. See our pages on company setup to get more information.

The decision is not entirely a matter of personal choice, however. In particular, if you only anticipate that you will be providing care and support to one or two customers, then it could well be that HMRC will assess you are actually employed by that person and not a self-employed carer. Even if you call yourself self-employed, it doesn’t necessarily mean that legally you actually are.

Care Quality Commission registration

The Care Quality Commission (CQC) regulates, inspects and reviews all adult social care services in the public, private and voluntary sectors in England. There are some very strict rules over who must register with CQC to be allowed to provide services.

Basically, if you provide personal care or other regulated activity, you need to be registered with CQC unless:

• You are employed by the service user either directly, or by someone who has a lawful authority to make arrangements on their behalf
• You are a self-employed sole trader, and you have no responsibility for supplying a substitute at anytime (ie, if you are on holiday, off sick, etc)*

If you have questions relating to registration, CQC’s Enquiry Line phone number is 03000 616161 and use its online contact form.

Insurance

If you’re considering anything other than being employed, you must make sure you have proper  insurance in place. If you are a self employed carer you are required by law to have public liability insurance, and can personally be held responsible for compensation claims. If you are employed directly by the service user, then it is their responsibility to make sure they have the proper insurances in place, however even then it may be sensible to protect yourself and get your own insurance. We have further advice on the insurance you need for working as a paid carer here.

Contracts 

Whichever model you choose to set up your business, you will need to make sure you have a suitable contract in place.

• If you are going to be employed by the service user, then you should make sure that you have a proper contract of employment to cover your employment rights . You can buy a template in our Shop that you can customise to meet yours and your service user’s needs
• If you are going to be self-employed, then you will need to make sure you provide a contract in place.  This will detail what you will do for you clients and how you will do it.

* This information was provided to You’re the Boss via the CQC helpline.