The short answer: what a nursing home and a residential home each pay
A residential care home in the UK pays from £349 a month for full accounting in 2026/27, while a nursing home usually starts higher, from around £549 to £899 a month, because of the extra payroll and NHS income work involved. Both figures climb with bed count, occupancy and how many sites you run, and a multi-site group can sit well into four figures a month.
Care homes of any real size are limited companies, so that monthly fee normally covers bookkeeping, payroll, management accounts, the VAT position and the year-end accounts with corporation tax. A small residential home of 15 to 20 beds sits at the lower end of the range. A 40-bed nursing home with a registered-nurse rota and a mix of NHS, council and private residents sits at the upper end. We set the full picture out on our healthcare and care home accountants page, and the headline figures are on our service fees.
Both kinds of home register with the Care Quality Commission (CQC), the regulator for adult social care in England, and both are subject to the same welfare rules on VAT and minimum wage. The accounting diverges because of what happens inside the home, not what it is called over the door. Here are the anchor numbers behind the fee.
Why a nursing home costs more to account for than a residential home
A nursing home costs more to account for because it must employ a registered nurse on every shift and it receives NHS income that a residential home never sees. Those two facts add a payroll tier and a monthly NHS reconciliation that a generalist often gets wrong, and that extra work is exactly what the higher fee buys.
Start with the difference in what each home actually does. A residential home provides personal care: help with washing, dressing, meals, mobility and prompting medication. It is staffed by care assistants and senior carers, and it is registered with the CQC for accommodation with personal care. A nursing home provides all of that plus nursing care delivered by registered nurses who hold a live PIN with the Nursing and Midwifery Council. It is registered with the CQC for the regulated activity of treatment of disease, disorder or injury, and it must have a qualified nurse on site 24 hours a day.
That registered nurse requirement is the first cost. Nurses are paid well above the care-assistant rate, and when the rota has a gap you fill it with an agency nurse at two to three times the cost of a permanent one. Those agency invoices usually carry VAT, and because care income is exempt you cannot reclaim it, so the agency line hits the accounts twice: once as wages you did not plan for, and once as VAT you cannot recover.
The second cost is NHS-funded Nursing Care, almost always shortened to FNC. When a resident in a nursing home is assessed as needing the nursing element of their care, the NHS pays a flat weekly contribution toward it, direct to the home. From 1 April 2026 the standard FNC rate is £267.68 a week, a 5.4 percent rise from £254.06, according to the government's announcement of the 2026/27 nursing funding increase. In the accounts that lands as a separate income stream that has to be tracked per eligible resident, reconciled against the Integrated Care Board (ICB) remittance, and recognised in the right month under FRS 102. Get it wrong and you either understate income or carry a debtor you never chase.
So the maths behind the fee is straightforward. A nursing home runs two pay tiers plus agency cover plus an NHS reconciliation, while a residential home runs one pay tier and bills councils and self-funders. More moving parts, more hours, higher fee.
What the monthly accountant fee actually includes
A care home accountant fee covers monthly bookkeeping, full payroll, management accounts, the VAT position, and the year-end accounts with corporation tax. For a nursing home it also covers the FNC income reconciliation and the registered-nurse payroll, which is where most of the extra cost sits. Here is what a complete monthly service looks like in practice.
- Bookkeeping and bank reconciliation. Fee income split by payer: councils, the NHS, self-funders and any third-party top-ups. Care homes carry more payer types than almost any small business, and each one pays on a different cycle.
- Payroll. Care assistants on or near the National Living Wage of £12.71 an hour from April 2026, sleep-in and waking-night cover, plus registered nurses for a nursing home, plus pension auto-enrolment, holiday accrual and the 15 percent employer National Insurance above the £5,000 secondary threshold.
- Management accounts. Occupancy, fee yield per bed, staff cost as a percentage of income and agency spend, so you see the home as numbers rather than a feeling.
- VAT position. Welfare care is exempt, so you do not charge VAT, but you also cannot reclaim it on your costs. A good accountant keeps the exemption clean and plans for the irrecoverable VAT on big spends.
- Year-end and viability. Statutory accounts, corporation tax, and the financial-position figures the CQC looks at when it assesses a provider's viability.
The first thing we usually fix on a new care home is the agency-staff line, because it is almost always the number quietly deciding the month. When a home cannot see its agency spend against occupancy in close to real time, it discovers the problem in the year-end accounts, ten months too late to act.
Five things that move a care home's accountant fee up or down
Five things move the fee: the number of registered beds, whether the home is nursing or residential, your payer mix, how much you lean on agency staff, and whether you run one home or several. Each one adds work, and the work is what you pay for. The chart below shows how those factors build a residential base fee up to a nursing home fee.
1. Bed count and CQC registration size
The bigger the home, the more transactions, payslips and reconciliations there are, so the fee rises with registered beds. Your CQC annual fee scales the same way, from £313 for the smallest services to £15,710 for a home registered for more than 90 people, set out in CQC's published fee scheme for social care services. The accountant fee is not the CQC fee, but they move in the same direction.
2. Nursing versus residential
This is the single biggest swing, for the reasons above: FNC reconciliation and a registered-nurse payroll tier. A nursing home of a given size will almost always cost more to account for than a residential home of the same size.
3. Your payer mix
NHS Continuing Healthcare, council placements and private self-funders all pay differently and on different terms. The more payer types you carry, the more billing and credit control sits behind the accounts, and the more the fee reflects it.
4. How much you lean on agency staff
Heavy agency use does not just cost wages. It adds irrecoverable VAT and it makes the payroll reconciliation harder, because agency hours sit outside your own payroll system and have to be pulled back in. A home that has stabilised its permanent rota costs less to run and less to account for.
5. Single site or a group
One home is one set of accounts. A group needs consolidation, inter-company entries and a per-site profit and loss so you can see which home is carrying which, and that pushes a multi-site operator into the four-figure monthly range.
Specialist or high street: is the difference worth it
For a nursing home the difference is usually worth it, because a generalist who has never reconciled FNC or priced a sleep-in rota tends to leave money on the table or miss a compliance point. For a small residential home the gap is narrower, but it is still real once a refurbishment or a minimum-wage review lands.
Three things separate a care specialist from a competent high-street firm. The specialist knows the welfare VAT exemption inside out, including the irrecoverable-VAT trap that can add tens of thousands to a refurbishment because none of the building VAT comes back. We break that down in our guide on when a care home is VAT exempt and what it costs you. The specialist also gets sleep-in pay right, which the courts have fought over for years; our piece on sleep-in shifts and the minimum wage covers what you owe night staff. And the specialist reconciles FNC against the ICB every month rather than once at year end.
Here is how the three common approaches actually compare for a care home, with the criteria that matter for a regulated home rather than a generic small business.
The comparison that matters for a CQC-regulated home, not a generic business:
| What a care home needs | DIY / software | Generic accountant | LOYALS specialist |
|---|---|---|---|
| Reconciles FNC income against the ICB each month | ✗ | ✗ | ✓ Built into monthly close |
| Prices sleep-in and waking-night cover for minimum wage | ✗ | ● If asked | ✓ Checked every rota change |
| Plans the irrecoverable VAT on a refurbishment | ✗ | ● | ✓ Before you spend |
| Tracks occupancy, voids and agency spend monthly | ✗ | ✗ Year-end only | ✓ Live management accounts |
| Produces CQC financial-viability figures | ✗ | ● | ✓ Registration and renewal ready |
| Open Mon to Sat for urgent calls | ✗ | ✗ Mon to Fri 9 to 5 | ✓ 10am to 7pm Mon to Sat |
This is why most nursing home owners, and growing residential homes, move from a generic accountant to a care specialist. For the full picture, see when it pays to switch from a generic accountant to a specialist.
What this means for you: getting a fixed quote before you commit
Before you sign with any accountant, get a fixed monthly quote based on your actual home, not a generic price, and make sure it names the FNC reconciliation and the registered-nurse payroll if you run a nursing home. The five minutes of prep below will get you an accurate number rather than a guess.
- Count your registered beds and current occupancy. Both drive the fee, and occupancy tells the accountant how much credit control sits behind your income.
- Note your payer mix. Roughly what share is NHS or Continuing Healthcare, council, and self-funder. More payers means more billing work.
- List your staffing. Care assistants, registered nurses, how much agency cover you use, and whether you run sleep-ins or waking nights.
- Ask what the fee includes. Does it cover FNC reconciliation and monthly management accounts, or only the year-end? The cheap quote is usually the year-end-only one.
- Get it in writing. A real care accountant will put the scope and the price in writing before you move.
None of this is complicated. It is the difference between paying for a year-end tidy-up and paying for someone who protects your margin every month. You can check what your own home should pay in a free 15-minute call with LOYALS, and we will tell you the number based on your beds, your payer mix and your staffing, not a one-size estimate.