Care home owners have until April next year to comply with new legislation or face going out of business.

People who run private care homes, nursing homes and residential homes need to start taking action now to make sure their premises comply, says Joanne Rolls, of Brighton-based accountants Begbies Traynor.

From April, a new organisation called the National Care Standards Commission takes over from local and health authorities as the regulator for care homes.

A new set of national minimum standards also comes into force.

Care homes will have to comply with much stricter standards for their residents.

Mrs Rolls said: "There will be 38 principal standards and a total of 250 standards.

"For example, homes may be required to increase the amount of space per occupant and reduce the total number of beds in their properties.

"No longer will homes be allowed to put three or more people in one room.

"Those sharing bedrooms will need at least two rooms, such as a bedroom and a living room for their use.

"From April 2007, 80 per cent of places offered must be in single rooms.

"All chair lifts will have to be replaced by passenger lifts or ramps.

"The new regulations will mean a loss of space and potentially having to obtain new building and fire regulation consents."

The changes come against a backdrop of tough trading conditions.

The minimum wage and working hours legislation have added to costs while fees paid out to care homes by local authorities have failed to keep up with inflation.

Mrs Rolls said: "Our advice is to plan now.

"Most importantly, ask your bank manager, accountant or other trusted adviser to help you draw up a financial plan ascribing costs against any improvements or the changes that need to be carried out.

"Budget prudently and try to assess what level of income you will receive if you have fewer residents.

"Don't rely on the current level of income per resident you receive from your local or health authority.

"This may well change under the new regulatory body.

"You must ask yourself now: Is this going to be a long-term business?

"If your current levels of profit are already too low, then by April they are unlikely to be higher."