Tim Wilson Managing Director, Assist Care Group
First published in Homecare Magazine, March 2025 – pages 26-7
Off-payrolling, or the gig economy, is widely used by businesses to classify workers as self-employed, avoiding Employers’ National Insurance Contributions (ENICs), employee benefits, and CQC fees. With a circa 10% increase in employment costs from April 2025, many providers are considering ways to reduce or eliminate these costs. In a saturated care market, where some businesses undercut rates below legal minimums or exploit workers, the saying “If you can’t beat them, join them” feels like an unavoidable reality for providers struggling to compete.
The gig economy in the care sector: an overview
Introductory agencies connect carers with individuals needing support; some carers are PAYE employees and others claim to be “self-employed”. Individual care workers (often referred to as Personal Assistants (PAs)) are exempt from CQC registration. Regulation depends on employment status rather than the act of personal care. This loophole enables introductory agencies to operate without regulatory oversight. This deprives the CQC of essential revenue and leaves care recipients with limited protections.
Unlike regulated providers, introductory agencies are not required to replace absent workers. Managing unplanned absences is a costly challenge for regulated providers, who must also cover Statutory Sick Pay (SSP), holiday entitlements, and employment tribunal risks. Introductory agencies offer cheaper alternatives but may leave people without care when their scheduled carer cannot attend.
Are workers truly self-employed?
The off-payroll model in care faces significant challenges, particularly when assessed against HMRC’s self-employment criteria. Three key hurdles
stand out:
Control over work: HMRC states that personal care rarely meets self-employment criteria. Care recipients typically dictate schedules, activities, and outcomes, undermining the autonomy required for genuine self employment.
Financial risk and responsibilities: Self-employed individuals must set their own rates and bear financial risk. However, introductory agencies often dictate
fees or provide billing and payment platforms, conflicting with HMRC’s requirement for financial independence.
Substitution & the CQC registration threshold: To be self-employed, HMRC requires unfettered substitution — a PA must be free to send a substitute without restrictions. However, this is rarely achievable in care because: the care recipient cannot approve, vet, or restrict the substitute. The substitute cannot come from a pre-vetted or regular pool of carers. The original PA must pay the substitute, taking full responsibility for the care provided.
