The short answer: what it costs and why CQC needs it
A properly built CQC cashflow forecast for a new care home costs from £999 and rarely more than £2,500 as a one-off, with the price moving on the size of the home and how much of your business plan already exists. That fee buys a three-year profit and loss, a month-by-month cashflow model, a closing balance sheet, and the written financial viability statement that a qualified accountant signs for CQC.
Why does CQC care about your forecast at all? Because a care home that runs out of money mid-year is a safeguarding problem, not just a business failure. The Care Quality Commission, the regulator for adult social care in England, has to be satisfied before it registers you that you can both start the service and keep it running. That obligation has a name and a number: Regulation 13 of the CQC (Registration) Regulations 2009. For more on the running-cost side of the same question, our guide on how much an accountant costs for a care home sits alongside this one. If you want the specialist support behind a registration, that lives on our healthcare and social care accountants page.
The number that matters most is not the forecast fee. It is the cost of getting it wrong. A forecast that skips the loss-making ramp-up, assumes you fill the home in three months, or quietly ignores the VAT you cannot reclaim is the version CQC questions. Each round of questions adds weeks, and every week of delay is a building you are paying for with no residents in it.
What Regulation 13 financial viability actually requires
Regulation 13 says a registered provider must have the financial resources to provide, and to keep providing, the regulated activity described in its statement of purpose. In plain terms, CQC needs to see you can afford to run the home you are describing, not just open the doors. To get that assurance, the regulator asks for a statement letter from a financial specialist.
That financial specialist is tightly defined. CQC will accept a statement from a qualified accountant or accountancy firm registered with a recognised accountancy supervisory or qualifying body, or from a bank or financial services firm regulated by the Financial Conduct Authority. The person signing it cannot be a relative or a friend. CQC publishes a statement letter template so the specialist knows exactly what to confirm. You can read the regulator's own wording on its references and financial viability guidance.
Here is the part that surprises first-time operators. CQC cannot approve your application until that assurance has been received. The financial viability statement is not a tidy-up step at the end. It is a gate. CQC also commonly asks to see the business plan and the cashflow that sits behind the statement, and it can ask for more if it has any concern about the numbers. Incomplete financial evidence is one of the most common reasons a care home application sits in the queue longer than it needed to.
A few categories are exempt from the statement letter, including NHS trusts, English local authorities, NHS GP practices and providers already inside CQC's Market Oversight Scheme. A private care home opening as a new limited company is not one of them. If you are registering a brand new entity, you need the forecast and the signed statement.
What goes inside the forecast
A care home forecast is not a single spreadsheet of optimistic numbers. It is a linked set of statements that have to agree with each other and survive a reviewer who knows the sector. The core of it is a three-year profit and loss, a month-by-month cashflow for the first 12 to 18 months, and a closing balance sheet, all driven off your real assumptions about beds, fees and staffing.
The assumptions are where a specialist earns the fee. A forecast for a home is built bottom-up: how many beds you are registered for, the split between local authority and private fee residents, your weekly fee per bed, and crucially how fast the home actually fills. New homes do not open full. Most take 12 to 24 months to reach stabilised occupancy, and every empty bed (a void) is lost income you still pay to heat, staff and insure.
Staffing is the other half. Care homes are labour heavy, and the cost is not just the rota. You need a registered manager in post before CQC will register you, so you are paying senior salaries before a single resident arrives. Night cover brings in sleep-in shift rules, which interact with the national minimum wage in ways that catch owners out, as we cover in sleep-in shifts and the minimum wage for care home owners. And when you cannot recruit fast enough, agency staff fill the gap at two to three times the cost, which is the single fastest way for a new home's margin to disappear.
Then there is the VAT that quietly does not come back. Personal care from a CQC-registered home is a welfare service, exempt from VAT under HMRC's VAT Notice 701/2. Exempt income sounds harmless until you realise it blocks recovery of the VAT on your build, your fit-out and most of your running costs. On a major refurbishment that irrecoverable VAT runs to tens of thousands of pounds, and it belongs in the forecast as a hard cash cost. We unpack the detail in when a care home is VAT exempt and when it is not.
The day-one cash a new home has to fund
The forecast exists to answer one question CQC and your bank both ask: have you got enough cash to carry the home until it pays for itself? For a new home the gap between first spend and breakeven is large, and it is the part owners consistently underestimate.
Walk the cash out in order. First the fit-out, equipment and furnishings to get the building registration-ready. Then the pre-opening staffing, including that registered manager and a core team, paid for weeks before any fee income lands. Then the registration costs, insurance and legal work. Then, biggest of all, the working capital to cover the months of partial occupancy while you climb toward a full home. The chart below shows how those four buckets stack up for an illustrative 30-bed home.
Premises sit on top of all of this. If you are buying the building rather than leasing it, the purchase price and the stamp duty on a commercial property are a separate, much larger layer of cash. Either way, the forecast has to show CQC and your funder that the cash buffer outlasts the loss-making period with room to spare. A home that runs out of working capital in month nine is exactly the outcome Regulation 13 exists to prevent.
Specialist accountant vs generalist vs DIY template
The cheapest forecast is the one you download as a template and fill in yourself, and it is also the one most likely to come back from CQC with questions. The difference between the three routes is not presentation. It is whether the person building the numbers understands the regulator and the sector well enough to model them correctly first time.
A downloaded template does not know your occupancy ramp, cannot sign the Regulation 13 statement, and will not flag the irrecoverable VAT until your accountant finds it later. A generalist accountant can produce a tidy forecast but often treats a care home like any other startup, missing the welfare VAT position, the sleep-in pay rules and the void modelling that a CQC reviewer looks for. A specialist builds those in from the start and signs the statement at the end. Here is how the three compare on the things that actually decide a care home application.
How the three common routes actually compare for a CQC care home forecast:
| What you need | DIY template | Generalist accountant | LOYALS specialist |
|---|---|---|---|
| Signs the Regulation 13 financial viability statement | ✗ Cannot | ● Sometimes | ✓ Yes, qualified |
| Models the occupancy ramp and voids month by month | ✗ | ● Often skipped | ✓ Built in |
| Builds irrecoverable welfare VAT into the cash | ✗ | ● | ✓ Day one |
| Costs sleep-in shifts and agency cover correctly | ✗ | ● | ✓ Sector rates |
| Knows the CQC fee scale and registration timeline | ✗ | ✗ | ✓ Yes |
| Available Mon to Sat for a fast-moving application | ✗ | ✗ Mon to Fri 9 to 5 | ✓ 10am to 7pm Mon to Sat |
This is why operators registering a new home tend to use a care specialist rather than a template or a generalist: the forecast and the signed statement come from the same place.
What this costs at LOYALS
The forecast itself is a one-off piece of work, priced on the size and complexity of the home. The ongoing accounting that follows once you open is a separate monthly fee, scaled to the home. We quote both in writing after a short call so the price reflects your actual situation rather than a guess.
What this typically costs at LOYALS
- CQC cashflow forecast and financial viability statement (one-off, 3-year P&L, cashflow, balance sheet, narrative): from £999
- Care home full monthly accounting once open (single site, up to 30 beds): from £349/month
- Care home monthly accounting (multi-site or 30+ beds): from £699/month
All quotes issued in writing within 24 hours, after a 15-min scoping call so we price your actual situation, not a guess. See our full price list.
Set that against the cost of delay. A forecast bounced by CQC can add weeks or months to a registration, and during that time you are carrying the building, the manager and the insurance with no fee income. A forecast that costs a four-figure sum but gets the application through first time is not the expensive option. The expensive option is the cheap forecast that fails.
What to do before you submit your application
If you are heading toward a CQC application, a handful of moves make the financial section straightforward rather than a bottleneck. None of them are complicated. They are about getting the right numbers in the right order before CQC asks.
- Pin down your real bed count and fee mix. CQC fees, staffing and income all flow from the maximum number of service users on your registration and the split between local authority and private fees.
- Be honest about the occupancy ramp. Model 12 to 24 months to fill, not three. A forecast that fills the home overnight is the one a reviewer distrusts.
- Put the irrecoverable VAT in the cash. Your welfare income is exempt, so the VAT on fit-out and build does not come back. Treat it as a real cost, not a rounding error.
- Cost the registered manager from day one. You pay senior care salaries before residents arrive. That pre-revenue burn belongs in the cashflow.
- Line up your financial specialist early. The Regulation 13 statement has to come from a qualified accountant or an FCA-regulated firm who is not a friend or relative. Leaving it to the last week is how applications slip.
- Build a buffer past breakeven. CQC wants to see you survive the dip with headroom, not land exactly on zero in the worst month.
Get those six right and the financial viability part of your registration stops being the thing that holds you up. You can check your own home's position in a free 15-minute call with LOYALS, and we will tell you honestly whether your forecast is ready or where the gaps are.