Care & Medical Sector

Every medical company and care agency is different; however, there are certain common issues that healthcare businesses face which are unique to the sector. Issues that we see regularly at RMT.

Squeezed Margins and Rigid Rates

The healthcare sector is currently caught in a structural squeeze. You often face “top-down” pressure from fixed NHS and Local Authority tariff rates that fail to keep pace with inflation. Meanwhile, “bottom-up” costs are soaring.

The result is often loss-making care packages or clinical contracts that drain cashflow. Under-pricing of complex care tenders at the outset frequently leads to long-term financial distress.

Operational and Regulatory Headwinds

  • The NIC Burden: Recent increases in National Insurance Contributions for lower-wage staff have disproportionately hit care agencies with large workforces.
  • Drug Supply & Pricing: Global supply chain instability and new trade deal dynamics mean drug prices are rising while availability remains unpredictable.
  • Estate Costs: For those running large sites like care homes, the 24/7 requirement for heating and energy has become a massive overhead.
  • The Recruitment Crisis: Tightening immigration controls and changing visa environments have made it harder and more expensive to source qualified staff, leading to a reliance on expensive agency “temp” labor.
  • CQC & Compliance: Maintaining “Good” or “Outstanding” ratings requires constant investment. A dip in rating can lead to suspended placements and immediate revenue collapse.
  • HMRC Debts: While HMRC was lenient during the pandemic, they are now frequently rejecting Time to Pay (TTP) deals and taking aggressive enforcement action against healthcare providers.

Strategic Solutions for Your Recovery

As expert turnaround practitioners with deep experience in the medical and care sectors, our specialists can help tackle these issues to get your business back on track. RMT offers:

  • Expert Assessment: A deep dive into your contract profitability and operational efficiency.
  • Financial Restructuring: Obtaining long-term HMRC Time to Pay deals to manage tax arrears.
  • Company Voluntary Arrangements (CVAs): Building powerful, creative CVAs to reduce costs such as exiting expensive property leases or managing redundancy costs without immediate cash outlay.
  • Pre-Pack Administrations: If the business is viable but the debt isn’t, we can run a sale through a pre-pack to protect the continuity of care for your patients or residents.
  • Orderly Wind-Downs: If the business is no longer viable, we can manage a Creditors Voluntary Liquidation (CVL).

Act Early to Protect Your Registration

The most important thing is to engage with RMT healthcare experts early. We provide a free initial assessment followed by a written report detailing the best strategy to help YOU restructure YOUR business.

A common concern in this sector is the impact of insolvency on CQC registration or NHS provider licenses. In a CVA, because the legal entity remains the same, your registration usually remains intact. In a pre-pack administration, the process is more complex as ownership changes. Our team understands these nuances and will guide you through the regulatory hurdles.

Our Track Record

RMT has extensive turnaround experience with healthcare firms, ranging from large residential care groups and specialist nursing homes to medical device manufacturers and domiciliary care agencies. We understand the sensitivity required when dealing with “people-based” businesses where patient safety is paramount.

We will always set out plans to AVOID formal insolvency action if possible.

Contact Our Healthcare Turnaround Team

Initial Consultation
Keith Steven
0800 9700539

South East England
Gary Weber
07739 325008

Scotland, NI & North West
Derek Robinson
07540 432112

Don’t wait for a CQC “Inadequate” rating or an HMRC winding-up petition. Call RMT today for free expert advice.

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Case Study 1 Small Healthcare Recruitment Agency Helped With HMRC Arrears

The Challenge

A small healthcare recruitment agency, run by a mother and daughter team, faced a severe financial crisis. In late 2024, the family suffered two bereavements, which diverted the directors’ attention and caused sales to fall. This led to a critical cash shortage, and the company was unable to pay its tax contributions, accumulating £68,000 in arrears for PAYE/NIC and VAT. The company had previously attempted to manage this with HMRC and even secured additional lending to make payments, but the combined burden of loan repayments and HMRC contributions caused cash flow to dry up again, leading HMRC to “fail” the arrangement. The company was now under increasing pressure from HMRC, with its corporation tax liability sent to a debt collection agency, putting the business at immediate risk.

The Solution

In March 2025, the director found RMT’s website and immediately sought help. After a prompt consultation, RMT was appointed to assist with the negotiations. The team quickly prepared detailed financial forecasts using information provided by the company. These forecasts were crucial as they allowed RMT to calculate a level of repayment that was both acceptable to HMRC and sustainable for the company. The solution was to negotiate a new, more manageable “Time to Pay” (TTP) arrangement with HMRC that would allow the company to repay the debt over a longer period. This approach would help the company avoid further enforcement action from HMRC and debt collectors.

The Results

In a little over four weeks, RMT successfully negotiated a new TTP deal with HMRC. The company was able to arrange to repay the £68,000 over 30 months, a much more manageable timeframe than the previous arrangement, with only a small upfront payment required. RMT also secured a second TTP deal for the company’s corporation tax liability. This swift and effective negotiation prevented any further enforcement action from HMRC and the debt collection agency. The company can now focus on stabilizing its business and returning to profitability without the constant stress of aggressive creditor action. This case demonstrates that with expert guidance and a well-structured plan, a business can successfully negotiate a manageable payment plan with HMRC, even after a previous arrangement has failed.

Case Study 2 – Hertfordshire Recruitment Company Suffering From Social Care Cutbacks

The Challenge

A Hertfordshire-based recruitment company, specializing in temporary placements in the health and social care sector, faced significant financial difficulties. The company’s primary struggle stemmed from local government cutbacks, which severely reduced its profit margins. This was compounded by a large historical debt to HMRC. Although the company had an informal short-term arrangement to repay HMRC £5,000 per week, this was placing an enormous and unsustainable strain on its cash flow. The financial situation was further exacerbated by local authorities delaying payments to the company. With HMRC debts of approximately £220,000, a bank overdraft of £25,000 and mounting creditor pressure, the business was at risk of collapse.

The Solution

In February 2016, the director met with a RMT regional manager to discuss all available options. Within 48 hours, RMT provided a detailed report recommending a Company Voluntary Arrangement (CVA). The CVA was proposed as a solution that would offer creditors a sensible and affordable monthly repayment, at a level the company could comfortably manage over an extended period. The KSA team took over all creditor liaison, working closely with the director to create prudent financial forecasts that demonstrated the business’s viability and its ability to repay creditors. The plan aimed to offer a minimum dividend of 40 pence in the £1. During the CVA proposal period, the company also actively pursued cost-cutting exercises and worked hard to expand its customer base to improve its future profitability.

The Results

The CVA proposal was successfully accepted by creditors, and the company formally entered the five-year Company Voluntary Arrangement. The CVA provided a legally binding framework that allowed the company to manage its debt in a structured way. This successful outcome was crucial as it protected the jobs within the company and secured the future of the business. By offering a realistic and manageable repayment plan, the CVA enabled the company to navigate its financial crisis, continue its operations, and focus on expanding its client base. This case highlights how a CVA can be a powerful tool for a business with cash flow issues, providing a path to recovery and stability by creating a formal, manageable repayment plan that benefits all parties involved.

 

 

Further Rescue Stories

Worried Director? We Can Save Or Restructure Your Company

See our case studies on how we have rescued companies like yours.

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