The short answer: buy or start a domiciliary care agency?
Start if you have more time than money, buy if you have more money than time. That is the honest one-line answer, and the rest of this guide is the detail behind it. Domiciliary care, meaning care delivered in a person's own home rather than in a care home, is a business where the two routes to ownership could barely look more different on cost, risk and speed.
Starting from scratch is cheap to launch and expensive in patience. You register a company, build your policies, recruit a registered manager, satisfy the CQC (the Care Quality Commission, the regulator for care services in England), and then find your first clients one by one. Buying is the reverse: a large cheque upfront in exchange for an agency that already has clients on the books, carers on the rota and money coming in.
Whichever route you take, you are stepping into a heavily regulated, low-margin, staff-heavy trade, so the accounting and the numbers matter from day one. Our specialist healthcare and social care accountants see both routes regularly, and the mistake that costs new owners most is underestimating how long the cash takes to arrive. We will come back to that.
What it costs to start a domiciliary care agency from scratch
Budget roughly £8,000 to £18,000 to register and launch, then a working-capital buffer on top of that to cover wages before the money comes in. The launch bill is made up of small, unavoidable items rather than one big number, and the CQC application sits in the middle of it.
The Care Quality Commission charges £1,522 for a new provider application in 2026, and you cannot legally deliver personal care until that registration is granted. Around that fee sits the rest of the setup: forming the limited company, writing the policies and procedures CQC expects to see, enhanced DBS checks, mandatory carer training, public liability and employers' liability insurance, care-planning and rostering software, and recruitment of a registered manager. Add it up and the realistic all-in figure to get CQC-ready and trading is commonly in the £6,350 to £16,650 range on top of the CQC fee, which is where the £8,000 to £18,000 headline comes from.
None of that is the expensive part. The expensive part is the wages you pay carers before your first invoices clear. A council contract might pay 30 to 60 days after you invoice, so if you are running a rota of carers from week one of trading, you are funding several payroll runs out of your own pocket first. This is where new agencies run out of road, and it is why a lender or a franchisor will always ask for a cashflow forecast before they back you.
If you want the full line-by-line launch budget, we set it out in our guide on how much it costs to start a domiciliary care agency. The one figure to hold in your head here is that the cheap-to-start route is not cheap to survive: the buffer, not the setup, is the real number.
What it costs to buy an established domiciliary care agency
Expect to pay from around £150,000 for a small book of care hours to well over £1 million for a sizeable agency, because you are buying profit, not premises. Home care agencies are valued mainly on their earnings, and smaller agencies (those under roughly £2 million of adjusted profit before interest, tax, depreciation and amortisation, known as EBITDA) currently change hands at around 4.5 to 6.5 times that adjusted EBITDA.
Real listings show the spread. A home care business with turnover near £1.6 million but modest profit was recently guided at £480,000, while a franchise turning over just under £1 million with strong profit was guided at around £1,025,000, and a larger agency on £3.4 million turnover carried a £2.3 million guide. Smaller, owner-run agencies with a few hundred thousand pounds of turnover often trade lower still, on a multiple of the owner's earnings rather than a clean EBITDA figure.
On top of the price you carry deal costs that a startup never sees: legal fees, financial due diligence, and often a slice of the price held back against warranties. But you also get something a startup does not have for months. You get clients receiving care, carers already trained and rostered, referral relationships with councils or hospital discharge teams, and income that starts on completion day rather than after a CQC assessment. Our guide on the accounting and due diligence reality of buying a domiciliary care agency walks through what to check before you sign.
CQC registration: the one difference that changes everything
CQC registration does not automatically transfer when you buy an agency, and that single fact reshapes the whole decision. Whether you keep the registration or lose it depends entirely on how you structure the purchase.
Buy the shares of the company and the registration stays put, because the legal entity that holds it has not changed. You still have to tell the CQC about the change in control, and confirm who the registered manager and nominated individual are, but care can continue without a gap. Buy only the assets, meaning the client list, the goodwill and the equipment rather than the company itself, and the registration does not come with them. You must register as a new provider before you can deliver a single hour of care, which puts you back on the 10 to 16 week clock a startup faces.
That is why share purchases are common in the care sector even though buyers usually prefer asset deals in other trades. Continuity of the CQC registration is worth a great deal, and losing it can strand you with clients you are legally not yet allowed to serve. It is also why due diligence on a share deal has to be thorough: with the company you inherit its history, its liabilities and any skeletons in the compliance cupboard. The CQC's own registration guidance for providers sets out what a change of ownership requires.
Starting from scratch sidesteps all of this. There is no registration to transfer and no inherited compliance risk, but there is also no shortcut: you go through the full CQC assessment yourself, which is the price of a clean slate.
Time to first revenue and the working-capital gap
Buying earns from completion day; starting can be four to six months from decision to meaningful income. That gap is the real cost of the cheaper route, and it is where the two paths separate most sharply.
Start from scratch and the sequence is fixed. Form the company, prepare for CQC, wait out the 10 to 16 week registration, then win your first care packages, then invoice, then wait for payment. Councils commonly settle 30 to 60 days after invoice, and private clients are quicker but smaller in the early days. String that together and the first real money often lands four to six months after you commit, with wages going out the door the whole time.
The maths underneath is unforgiving because home care is a low-margin, high-turnover trade. The National Living Wage is £12.71 an hour from 6 April 2026, and you must pay it for travel time between care calls, not just the minutes spent in a client's home. The Homecare Association's minimum price for homecare in England for 2026/27 is £34.42 an hour once wages, travel time, on-costs and a small margin are built in, yet the average rate councils actually pay is closer to £25 an hour. That gap of roughly £9 an hour is exactly why cashflow, not profit on paper, is what sinks under-funded startups.
Buy an established agency and you skip the drought. The clients are already receiving care, the invoices are already going out, and the money is already arriving on its normal cycle. You still need working capital to run the payroll, but you are funding it from revenue that exists rather than revenue you hope to win. For a fuller look at how care income actually flows, see our guide from our care sector accountants on billing and getting paid.
The tax and accounting differences between the two routes
Starting is mostly about choosing a structure and claiming setup costs; buying is mostly about the shares-versus-assets decision and how the price is taxed. The two routes put very different questions in front of your accountant.
When you start, the early accounting jobs are straightforward. You choose whether to trade as a sole trader or a limited company (most agencies incorporate for liability and credibility, and you can model the difference with our sole trader vs limited company calculator). You can claim pre-trading expenditure incurred in the seven years before you start, and the Annual Investment Allowance covers equipment you buy to set up. If you register as a managed CQC provider, your care income is exempt from VAT under the welfare exemption, so you do not charge VAT on care, though you also cannot reclaim VAT on most of your costs. Company formation is the natural first step.
When you buy, the big question is shares or assets. A share purchase means buying the whole company, so you inherit its trading history, its contracts, its CQC registration and every liability, and you pay only 0.5 percent stamp duty on the share price. There is no corporation tax relief on what you pay for the shares. An asset purchase means buying the client book, goodwill and equipment; you leave old liabilities behind and staff transfer to you under TUPE (the Transfer of Undertakings (Protection of Employment) rules, which move employees to a new owner on their existing terms), but purchased goodwill in a care agency generally gets no corporation tax relief, and you take on the CQC re-registration timeline. Most home care agencies lease their office, so stamp duty land tax rarely bites, and a whole-business asset sale usually qualifies as a transfer of a going concern, which is outside the scope of VAT. HMRC's welfare services VAT guidance (Notice 701/2) explains where the care VAT exemption starts and stops.
One quiet trap sits under both routes: the introductory agency model. If you introduce self-employed carers to clients and take a commission rather than employing carers and managing their care, you may fall outside the welfare exemption and have to charge 20 percent VAT on your commission once your taxable turnover passes £90,000. That is a very different tax profile from a managed provider, and it is worth settling before you commit to either route.
Here is how three common ways of getting the numbers right actually compare when you buy or start a home care agency:
| What the decision needs | DIY / bookkeeper | Generic accountant | LOYALS care specialist |
|---|---|---|---|
| Builds a CQC registration cashflow forecast | ✗ | ● If asked | ✓ Registration-ready |
| Runs the share vs asset purchase and due diligence | ✗ | ● Generic | ✓ Care-specific |
| Confirms whether CQC registration transfers | ✗ | ✗ | ✓ Built in |
| Gets the welfare VAT exemption right | ✗ | ● | ✓ Managed vs introductory |
| Checks National Living Wage across travel time | ✗ | ✗ | ✓ Every payroll |
| Fixed monthly fee, Mon to Sat support | ✓ No fee | ● Hourly common | ✓ Fixed monthly |
This is why owners buying or launching a care agency tend to move from a generalist to a specialist before, not after, they commit.
So which route is right for you?
Start if capital is tight and you can wait; buy if you have the funds and want to be trading now. The decision usually comes down to three things: how much cash you can put in and keep in reserve, how quickly you need income, and how much appetite you have for building versus inheriting.
Start from scratch if
- Your capital is limited but you can survive four to six months with little or no income from the agency.
- You want a clean compliance history and no inherited liabilities.
- You are happy to build clients, carers and referral relationships yourself, and you see the slow start as a moat.
Buy an established agency if
- You have the funds (or backing) for a six or seven-figure purchase and want revenue from completion day.
- You value an existing client base, a trained team and live council or NHS relationships over a lower entry price.
- You are comfortable with due diligence and, ideally, a share purchase that keeps the CQC registration intact.
There is a middle path too. Some owners start small to learn the trade and the regulator, then buy a competitor once they understand the numbers and can borrow against a track record. Whichever way you lean, the deciding work is the same: a realistic cashflow forecast, a clear view of the tax on the route you pick, and a payroll that stays the right side of the National Living Wage. Get those three right and either route can work. Get them wrong and the cheaper route is not cheaper for long. You can pressure-test your plan in a free call with LOYALS before you commit a penny.