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

Are you thinking about becoming a self-employed carer, but not sure how to get started? We have put together some essential advice to point you in the right direction. Providing care and support to people in need is a rewarding role.  There is always a need for trusted paid carers throughout the UK. People are living longer and therefore more of us will need care and support at some point in our lives.  Therefore more private home help will be required to deliver it.

You may be considering setting up as a self-employed carer (paid carer), for one of a number of reasons, including:

  • You may already be informally caring for someone at the moment, but not be able to carry on without getting paid
  • You might know someone locally who needs help and if you were paid, you would be able to provide the care and support they need; the person who requires help would be able to get it from someone they already knew and liked
  • You might currently be working for a provider or agency as a carer and want to branch out to work on your own
  • You might want to start a new care agency providing care across your region

Whatever your reasons for wanting to become a paid carer, and no matter the size of the enterprise that you want to set up, there are some things you need to think about and do to achieve your goal.

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.

Comments (13)
  • Angela Costa
    May 14, 2019

    Hi, i am really thinking of becoming either self employed or employed by the service user. could you please help me on this matter?

    many thanks
    Angela Costa

  • Frank Keys
    May 16, 2019

    Thanks i found the advice offered very helpful and informative .I have worked in care in the past for 8 years and have an NVQ 2 and a few other qualification.Due to a long illness i have been unable to work but would like to work a few hours a week as i am well on the way to recovery but need a job i can work round appointments etc.So once again thank you

  • Meryem Osman
    Jun 16, 2019

    I been doing caring about 15 years I left my Company last year i’ve been came a private carer .I have my on Clines but all my paperWorks Enfield disability action doing in Edmonton they deciding how much they have to pay me I don’t know my rides can you help me if I’m a private carer I shouldn’t decided how much I’m going to work could you help me please because I don’t know my rights thank you so much

    • Nick
      Jul 11, 2019

      Hi Meryem

      I don’t entirely follow what you’re saying above, but I think you’re asking if you can decide how much work you do as a self-employed carer. The answer is ‘yes’ you decide, although obviously it needs to fit with your clients wishes too. However it looks to me like you might be using an agency to find you clients and therefore be engaged through an introduction agency. is that the case?

  • Ashleigh
    Sep 05, 2019

    Hi,
    I found this article very helpful. Just wondering if you have any recommendations on where to start looking for a client base?
    Thanks, Ashleigh

    • Nick
      Sep 06, 2019

      Hi Ashleigh – two people have asked about that this week so I’m going to do an article on it next week. I’ll let you know when it’s posted and give you the link.

      Many thanks

  • Amanda barski
    Oct 07, 2019

    I am looking into being self employed carer I have nvq 3 cava and A1 assessor in health and social care. But not sure what I need to start up I know I need insurance public liability please coul you advise

    • Nick
      Jan 15, 2020

      Hi Amanda – Sorry for the slow reply, we’ve just put the finishing touches to our video to help people through the process, hopefully, this will be a good guide for you Becoming a Paid Carer – the basics

  • Roxy
    Dec 23, 2019

    Hi I have been doing children’s residential care work and similar for a couple years with an agency.

    I’ve decided I want to work for my self going self employed so I can have the majority of hourly rate in my own pocket. Apart from insurance what are the other essential legalities? And what’s the best way to make my services known to businesses?

    • Nick
      Jan 06, 2020

      Hi Roxy – I’d suggest having a look at the new video that we’ve just created on how to go about getting started you can find it on our YouTube Chanel – here

  • Benjamin
    Mar 13, 2020

    Hi, I have a question I’m hoping you could answer.

    I’m considering the self-employed care worker route and have some potential clients. My question is regarding paying using their direct payments. My understanding is that if they were to directly employ a PA using direct payments they would be restricted to the hourly rate they could pay whereas if I’m self-employed my rate could be higher. Is that the case or would there be issues for them if they used their direct payments to pay me more than a directly employed PA?

    Thanks,

    Ben

    • Nick
      Mar 18, 2020

      Hi Ben

      As a Self-employed carer you should be able to set your own hourly rate, obviously, there are a few things to take into consideration such as your costs and the local market rate (Making your care business pay booklet) but you would expect your hourly rate to be higher than the rate you would be paid if you were employed, after all you’re taking on the cost of your training, holidays, sick-leave and insurance rather than an employer paying for this. Most local authorities understand the difference and why a higher hourly rate would be paid to a self-employed carer. I have heard of a few cases where people on direct payments have been told a carers rates were too high, but the point of a direct payment is that the individual gets the care that meets what’s in their support plan – they should be able to make their own choices as to how this is met (within reason). If your rate is reasonable you should be able to explain to the LA, how your rate is acutally pretty-much inline with an employed care worker if you include all their on-costs, holiday pay, training, equipment etc. Obviously the ultimate decision over whether your are employed or self-employed will come down to HMRC regulations rather than personal choice – if you’re in doubt then have a look at our article here.

      I hope that helps

      Nick

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