How to set up as a self-employed carer in the UK: a complete guide

Becoming a self-employed carer is one of the most rewarding career decisions many care professionals make. You work with clients you choose, set your own rates, manage your own schedule, and keep the majority of what you earn. But getting set up properly, legally, financially, and practically, takes some upfront effort. This guide covers everything you need to know.

Step 1: Register as self-employed with HMRC

As soon as you begin earning income as a self-employed carer, you must register with HMRC. You do this by creating a Government Gateway account and registering for Self Assessment. You can do this online at gov.uk.

You must register by 5 October in your second year of trading. But it is strongly advisable to register as soon as you start, not least because you will need to start keeping records of your income and expenses from day one.

Once registered, you will complete a Self Assessment tax return each year (for the tax year ending 5 April), declaring your income and allowable expenses. The deadline for online returns is 31 January the following year. Tax owed is also due on 31 January (and a second payment on account on 31 July).

Step 2: Understand what you will pay in tax and National Insurance

As a self-employed person, you pay:

Income tax, 20% on profits between £12,571 and £50,270 (the basic rate). Above that, 40% (higher rate). You have a personal allowance of £12,570 which is tax-free.

Class 4 National Insurance, 9% on profits between £12,570 and £50,270, and 2 per cent above that, paid this through your Self Assessment return.

Class 2 National Insurance, currently £3.45 per week when profits are above the Small Profits Threshold (£12,570). This counts towards your State Pension and certain benefits entitlement.

You do not pay employer's National Insurance as a self-employed person, this is a significant saving compared to employed carers.

It is sensible to set aside roughly 25 to 30% of your earnings for tax and National Insurance, and keep it in a separate savings account until it is due.

Step 3: Get a DBS check

You will need an Enhanced DBS (Disclosure and Barring Service) check to work with vulnerable adults. This checks for criminal records, cautions, and any barring decisions.

As a self-employed person, you cannot apply for a DBS check directly, you must apply through a registered body. There are various umbrella organisations that can process DBS checks for a fee (usually £40 to £60 for an Enhanced check). Hibant can guide you through this process.

Once you have a DBS certificate, you can sign up to the DBS Update Service for £13 per year. This keeps your check current and allows prospective clients and employers to check your certificate status online, a significant convenience.

Step 4: Take out public liability insurance

Public liability insurance protects you if a client is injured or their property is damaged while you are working. For care workers, professional indemnity insurance is also important, this covers claims arising from advice or guidance you have given.

Insurance is not optional, it is essential. Most reputable platforms, including Hibant, require self-employed carers to hold valid insurance before working with clients. Policies typically cost between £80 and £200 per year for self-employed care workers. Providers include Balens, Morton Michel, and Unity Insurance Services.

Step 5: Understand what you can claim as expenses

One of the benefits of self-employment is that legitimate business expenses reduce your taxable profit. As a self-employed carer, you can typically claim:

Mileage to and from client visits (at 45p per mile for the first 10,000 miles, then 25p). You must keep a mileage log. Training and continuing professional development costs. Professional memberships and subscriptions. Insurance premiums. Mobile phone costs (the portion used for work). Uniform or workwear (if it is specific to your role and not general clothing). Some equipment and supplies.

Keep records of all expenses with receipts or bank statements. A simple spreadsheet works well for most self-employed carers.

Step 6: Set your rates

Research what carers in your area charge for the type of work you do. Rates vary significantly by location, specialism, and experience. In London and the South East, experienced carers typically charge £20 to £28 per hour. A good starting point for most carers is £20 per hour, with rates rising with experience and specialist skills. For live-in care, a weekly rate of £1,200 or above is a reasonable baseline.

Do not undervalue yourself. Your rate should reflect your experience, your specialism, and what it actually costs you to run your business. Remember that as a self-employed person, you do not receive sick pay, holiday pay, or pension contributions from an employer, your rate needs to factor these in.

Step 7: Use a written agreement

For each client you work with, it is good practice to have a simple written agreement in place. This does not need to be a formal contract, but it should set out: the scope of care, the schedule, the rate and payment terms, how either party can end the arrangement, and who to contact in an emergency.

This protects both you and the client and avoids misunderstandings. Hibant provides a framework for this.

Step 8: Keep up your training and registration

While there is no mandatory registration for self-employed carers (unlike, say, nurses or social workers), it is strongly advisable to stay current with relevant training. First aid, moving and handling, safeguarding, dementia awareness, and medication administration are all valuable. Many free or low-cost courses are available through Skills for Care and local NHS trusts.

Consider joining a professional body such as the UKHCA (United Kingdom Homecare Association) or the Care Workers Charity. These provide support, resources, and some degree of professional credibility.

Common mistakes to avoid

Not registering with HMRC on time, HMRC can issue a penalty of £100 for missing the October deadline. Not keeping income and expense records, without records, you cannot accurately complete your tax return. Undercharging, many new self-employed carers set rates too low, particularly below £20 per hour, which is not sustainable once tax, insurance, and unpaid time are factored in. It is also harder to raise rates later once a client expectation is set. Working without insurance, even a minor incident could result in a significant claim. Never work without it. Not saving for tax, being caught short at the January payment deadline is stressful and avoidable.