As we look ahead to the new tax year, the landscape of health and social care finance continues to present both challenges and opportunities. My role as Finance Director at Unity Plus Healthcare Limited involves navigating these complexities to ensure our organisation remains sustainable while upholding our commitment to quality care and our dedicated workforce.

One significant and clearly defined change taking effect from April 2025 concerns Employers’ National Insurance contributions. The financial implications for providers like us are stark. Currently, employers contribute 13.8% on employee earnings exceeding £175 per week (£9,100 per year). From April 2025, this threshold is set to be significantly lower, to £96 per week (£5,000 per year), while the contribution rate simultaneously increases to 15%.

When you factor this structural change alongside the recent, and entirely much-deserved, increase in the National Minimum Wage (around 6.7%), the cumulative impact on the cost to employ a full-time team member on the minimum wage is staggering. This increase is projected to be around 49% in employer contributions for that individual.

Read our response to the Autumn health sector budget here.

The financial reality of social care

It’s crucial to discuss this specific change within the broader context of the UK’s health and social care sector. At Unity Plus and across the industry, we are acutely aware of the incredible dedication and hard work of our frontline staff, particularly our Care Assistants. They are the bedrock of the services we provide, delivering compassionate and essential support daily.

Let me be unequivocally clear: Care Assistants, and indeed all frontline care workers, absolutely deserve the increases we have seen in the National Minimum Wage. Their work is demanding, skilled, and profoundly important. Many providers, including Unity Plus, wish we had the financial capacity to reward their commitment even further, reflecting the true value they bring to society.

However, the desire to pay our staff more runs headlong into a persistent challenge: the chronic underfunding of the social care sector by central government. Year after year, funding settlements fail to keep pace with rising costs, demographic pressures, and the increasing complexity of need. This creates an unsustainable equation for providers. We face rising wage bills (which we support in principle) and now sharply increasing Employers’ NI, without a corresponding increase in the funding we receive for the essential services we deliver. This puts immense pressure on already tight margins, limiting investment in training, technology, and, critically, staff remuneration beyond statutory requirements.

Read about the potential mental health challenges of care workers.

Impact of Employers’ National Insurance changes on providers

The upcoming Employers’ National Insurance changes will, therefore, add another layer of significant financial pressure onto care providers. This isn’t just an abstract accounting issue; it directly impacts our ability to operate, innovate, and grow. It forces difficult decisions about resource allocation and makes it increasingly challenging to bridge the gap between the desire to reward our staff appropriately and the financial realities imposed by inadequate sector funding.

Supporting choice and flexibility: Introducing Care Accounts Ltd

At Unity Plus Healthcare, we believe in proactive solutions. We recognise that the traditional employment model doesn’t suit everyone. Many skilled professionals prefer the flexibility and autonomy of operating independently, choosing to work outside of traditional payroll structures. This includes both self-employed (sole trader) professionals and those operating through their own Limited Companies (Personal Service Companies – PSCs).

However, navigating the financial, administrative, and regulatory requirements of these independent working models – particularly rules like IR35 (off-payroll working rules) – can be complex and daunting.

To address this, Unity Plus Healthcare established Care Accounts, a specialist company incorporated specifically to support individuals choosing these independent paths within the health and social care sector.

Care Accounts is designed to empower independent care professionals by simplifying their administrative and compliance burdens. Key benefits include:

IR35 alignment & status determination: We provide robust systems and guidance to help ensure that engagements structured through Care Accounts are appropriately assessed for employment status, aligning with IR35 regulations (off-payroll working rules). This provides crucial peace of mind for the individual contractor (whether sole trader or PSC), the end client (care provider engaging the service), and ensures compliance.

Streamlined administration & compliance: Care Accounts significantly simplifies the administrative overhead. Depending on the chosen structure (sole trader or PSC operating via Care Accounts), we facilitate compliant invoicing and payment processes. We provide support and infrastructure to help ensure individuals meet their statutory obligations – such as tax and National Insurance – efficiently and correctly, reducing complexity for those operating outside direct employment. Crucially, Care Accounts is operated by a dedicated team including two Chartered Accountants and a trainee accountant, bringing professional financial expertise to manage these processes. This provides significant peace of mind regarding financial accuracy and compliance, both for the individual professional and for the companies engaging their services.

Focus on care: By managing much of the financial administration and compliance overhead, Care Accounts frees up independent professionals to concentrate on what they do best – delivering high-quality, person-centred care.

Addressing provider concerns regarding IR35

As a provider of temporary and flexible staffing solutions, Unity Plus Healthcare understands that some care providers we partner with may feel cautious about engaging individuals who operate outside standard payroll. The changes to the IR35 (off-payroll working) rules implemented in April 2021 placed greater responsibility on the end client (the care provider) for determining the employment status of contractors operating through intermediaries like PSCs.

We want to provide absolute reassurance on this front. Care Accounts was established precisely to address these complexities and mitigate associated risks. Our robust processes, overseen by qualified accountants, include thorough status assessments aligned with IR35 criteria. Furthermore, the structure ensures that all individuals engaged via Unity Plus and operating through Care Accounts have mechanisms in place for their statutory obligations (tax and National Insurance) to be correctly calculated and handled.

By utilising workers supplied via Unity Plus, where Care Accounts manages the engagement structure for independent professionals, client providers can have confidence that compliance is proactively managed, relieving concerns about potential liabilities related to IR35 and ensuring all workers fulfil their necessary statutory duties.

Looking forward

The health and social care sector faces significant headwinds, and the upcoming Employers’ National Insurance changes represent another substantial financial challenge. While Unity Plus Healthcare will continue to advocate strongly for fair and sustainable funding from the central government, we are also committed to practical solutions. We remain steadfast in our support for fair wages for care workers and recognise the immense value they provide.

For those individuals seeking a flexible route outside direct employment, whether as a sole trader or through their own limited company, Care Accounts offers a structured, compliant, and supportive solution, backed by qualified accounting professionals, ensuring they can navigate their professional responsibilities with confidence. For our valued client partners, it provides a compliant and reliable way to access flexible, skilled professionals, mitigating IR35 risks.

We believe in the resilience and importance of our sector and are dedicated to finding ways to support both our directly employed staff and those choosing alternative, flexible working arrangements, while providing peace of mind to the providers who rely on our services.

Partner with Unity Plus

At Unity Plus, we’re committed to putting people first, whether it’s the carer or the care recipient. We’re passionate about our work, and we don’t just focus on numbers. 

If you’re a care home and interested in learning more about working with us, get in touch with our friendly team.

Related content

Unity Plus responds to the Autumn Budget

Mental Health Challenges among Healthcare Workers: Impact and Solutions