How to Start a Domiciliary Care Agency in the UK: Complete 2026 Guide
Step-by-step guide to starting a home care agency in the UK. Learn about CQC registration, legal requirements, funding, staffing, and building a sustainable care business.
Starting a Home Care Agency: What You Need to Know
The UK's domiciliary care sector is growing rapidly. With an ageing population and increasing preference for receiving care at home rather than in residential settings, demand for quality home care services continues to rise. According to Skills for Care, the adult social care workforce in England alone employs approximately 1.52 million people, with domiciliary care representing one of the largest segments.
If you're considering starting a home care agency, this comprehensive guide covers everything you need to know—from legal requirements and CQC registration to business planning and sustainable growth.
Understanding the UK Care Market
Current Market Size and Growth
The UK home care market is valued at over £10 billion annually and continues to grow. Key drivers include:
- Demographic changes: The UK population aged 65 and over is projected to grow by 20% by 2030 (Office for National Statistics)
- Policy direction: NHS and local authority strategies increasingly favour care at home over institutional settings
- Consumer preference: Surveys consistently show that most people prefer to receive care in their own homes
Types of Domiciliary Care Services
Before starting, decide which services you'll offer:
| Service Type | Description | Typical Hourly Rate |
|---|---|---|
| Personal care | Washing, dressing, toileting assistance | £22–£28 |
| Companionship | Social interaction, accompanying to appointments | £18–£24 |
| Medication support | Prompting and administering medication | £22–£28 |
| Domestic support | Cleaning, laundry, meal preparation | £18–£24 |
| Complex care | Specialist nursing, dementia, end-of-life | £28–£40+ |
| Live-in care | 24-hour support in the client's home | £800–£1,500/week |
Legal Requirements and Regulations
CQC Registration (England)
In England, any agency providing personal care must register with the Care Quality Commission (CQC). This is a legal requirement—operating without registration is a criminal offence.
Key CQC requirements:
- Registered Manager: You must have a registered manager who is fit and competent. They must pass a DBS check and demonstrate relevant qualifications and experience
- Registered Provider: The organisation itself must register as a provider
- Statement of Purpose: A document outlining your services, aims, and objectives
- Policies and Procedures: Comprehensive documentation covering safeguarding, complaints, medication, health and safety, and more
- Quality Assurance: Systems to monitor and improve service quality
CQC registration fees (2026):
- Application fee: £3,066 (for providers with up to 4 locations)
- Annual fee: Varies based on the number of service users (typically £1,200–£2,400 for small agencies)
The registration process typically takes 12–16 weeks from application submission.
Regional Variations
| Nation | Regulator | Key Differences |
|---|---|---|
| England | CQC | Personal care registration required |
| Wales | Care Inspectorate Wales (CIW) | Similar to CQC with Welsh language requirements |
| Scotland | Care Inspectorate | Separate registration and inspection regime |
| Northern Ireland | RQIA | Regulation and Quality Improvement Authority |
Other Legal Requirements
Beyond CQC registration, you'll need:
- Company registration: Register with Companies House (or as a sole trader)
- ICO registration: Data protection registration with the Information Commissioner's Office (approximately £40–£60/year)
- Insurance: Public liability (minimum £5 million), employer's liability (£10 million), professional indemnity
- Local authority registration: Some councils require additional registration
- DBS checks: All staff working with vulnerable adults need enhanced DBS checks
Creating Your Business Plan
A robust business plan is essential—both for your own planning and for securing funding or contracts.
Key Components
1. Executive Summary A concise overview of your agency, services, and goals.
2. Market Analysis
- Local demographics and care needs
- Competitor analysis
- Gap in the market you'll fill
3. Services and Pricing Use our Care Rate Calculator to determine sustainable hourly rates that cover:
- Staff wages (including National Living Wage increases)
- Travel time and mileage
- Training and supervision
- Administrative overheads
- Insurance and compliance costs
- Profit margin for reinvestment
4. Marketing Strategy
- How you'll attract private clients
- Strategy for securing local authority contracts
- Digital presence and reputation management
5. Financial Projections
- Start-up costs (typically £20,000–£50,000)
- Monthly operating costs
- Break-even analysis
- Cash flow forecasts (minimum 12 months)
Start-Up Cost Breakdown
| Category | Estimated Cost |
|---|---|
| CQC registration and fees | £3,000–£5,000 |
| Insurance (annual) | £2,000–£4,000 |
| Legal and accountancy setup | £1,500–£3,000 |
| Office equipment and software | £2,000–£5,000 |
| Website and marketing | £1,500–£5,000 |
| Training and policies | £2,000–£4,000 |
| Working capital (3 months) | £10,000–£25,000 |
| Total | £22,000–£51,000 |
Staffing Your Agency
Recruitment
Finding and retaining quality care workers is one of the biggest challenges in the sector. The current vacancy rate in adult social care is approximately 9.9% according to Skills for Care.
Recruitment strategies:
- Local job boards and Indeed
- Social media recruitment
- Referral bonuses for existing staff
- Partnerships with local colleges
- Values-based recruitment focusing on compassion and reliability
Minimum Qualifications
While there are no mandatory qualifications to work as a care worker, most agencies require:
- Care Certificate: A nationally recognised set of 15 standards (typically completed within 12 weeks of starting)
- NVQ Level 2/3 in Health and Social Care: Preferred for more experienced roles
- Enhanced DBS check: Mandatory
- Right to work documentation: Proof of eligibility to work in the UK
Fair Pay and Retention
Staff retention is crucial for quality care. Consider:
- Paying above minimum wage (the National Living Wage from April 2025 is £11.44/hour for workers aged 21+)
- Paying for travel time between clients
- Providing mileage allowance (HMRC rate: 45p/mile)
- Offering progression pathways
- Investing in ongoing training
Securing Clients and Contracts
Private Clients
Private clients typically pay higher rates and offer more flexibility. Marketing approaches include:
- Online presence: Professional website, Google Business Profile
- Local networking: GP surgeries, hospitals, community groups
- Referral partnerships: With occupational therapists, social workers
- Quality reputation: CQC ratings and client testimonials
Local Authority Contracts
Councils commission significant amounts of home care. To win contracts:
- Register on procurement portals (e.g., Contracts Finder, regional frameworks)
- Demonstrate quality: Good CQC rating essential
- Competitive pricing: Understand local authority fee rates (check our Care Prices by location)
- Capacity: Show you can meet demand
- Specialisms: Dementia care, complex needs can differentiate you
NHS Continuing Healthcare
Some clients qualify for NHS-funded care. Building relationships with local Clinical Commissioning Groups (now Integrated Care Boards) can provide referrals.
Technology and Systems
Modern care agencies need robust systems:
| System | Purpose | Typical Cost |
|---|---|---|
| Care management software | Rostering, care plans, reporting | £50–£200/month |
| Electronic call monitoring | Proving visit times for billing | Often included |
| Mobile apps | Staff can access care plans, log visits | Often included |
| Payroll software | Staff payments, pension auto-enrolment | £20–£100/month |
| Accounting software | Financial management | £15–£50/month |
Popular care management systems in the UK include Birdie, CareLineLive, CarePlanner, and Access Care Planning.
Quality and Compliance
CQC Inspections
CQC inspects services and rates them as:
- Outstanding: Exceptional care
- Good: Meets expectations
- Requires Improvement: Some areas need attention
- Inadequate: Significant concerns
New agencies are typically inspected within 12 months of registration.
The Five Key Questions
CQC assesses services against five key questions:
- Safe: Are people protected from abuse and avoidable harm?
- Effective: Does care achieve good outcomes?
- Caring: Is care delivered with compassion?
- Responsive: Does care meet people's needs?
- Well-led: Is there good leadership and governance?
Building Quality Systems
- Regular care plan reviews
- Staff supervision and appraisals
- Incident reporting and learning
- Complaints procedures
- Service user feedback
- Continuous improvement processes
Financial Sustainability
Understanding Your Costs
Many care agencies fail because they don't fully understand their costs. Use our Care Rate Calculator to ensure your rates cover:
- Direct costs: Staff wages, travel, training
- Indirect costs: Management, administration, premises
- Compliance costs: CQC fees, insurance, audits
- Profit margin: For reinvestment and sustainability (typically 15–25%)
Cash Flow Management
Care agencies often face cash flow challenges because:
- Local authorities pay in arrears (often 30–60 days)
- Staff expect weekly or monthly payment
- Unexpected costs arise (recruitment, training)
Solutions:
- Maintain cash reserves (minimum 3 months' operating costs)
- Invoice promptly and chase payments
- Consider invoice factoring if needed
- Build private client base for faster payment
Common Mistakes to Avoid
- Underpricing services: Not covering true costs leads to unsustainable businesses
- Poor recruitment: Rushing to hire without proper vetting
- Inadequate training: Care Certificate and ongoing development are essential
- Weak systems: Paper-based processes don't scale
- Ignoring compliance: CQC requirements must be embedded, not bolted on
- No marketing: Assuming clients will simply appear
- Overreliance on council contracts: Diversify income streams
Next Steps
Starting a domiciliary care agency is a significant undertaking, but with proper planning and commitment to quality, it can be both financially rewarding and personally fulfilling.
Recommended actions:
- Research your local market and competitors
- Use our Care Rate Calculator to model your pricing
- Develop a detailed business plan
- Seek advice from accountants and solicitors experienced in care
- Begin the CQC registration process early
- Build your policies, procedures, and training programmes
- Recruit carefully based on values and competence
Further Resources
- CQC Provider Handbook – Official guidance for care providers
- Skills for Care – Workforce development resources
- Care Prices by Location – Regional rate data for the UK
- Care Agency Charge Rates vs Pay Rates – Understanding the difference
This guide was last updated in January 2026. Regulations and rates change regularly—always verify current requirements with official sources.