Right to Work requirements are changing from 1 October 2026. Is your business ready?

Right to Work requirements are changing from 1 October 2026, extending responsibilities beyond traditional employment relationships. For SMEs that use contractors, subcontractors or other flexible working arrangements, now is the time to review how Right to Work compliance is managed.

Right to Work checks are already a fundamental part of employing people in the UK. Employers have a legal responsibility to prevent illegal working by ensuring that individuals they employ have the appropriate permission to work.

When checks are completed correctly and in accordance with the prescribed requirements, they can provide an employer with a statutory excuse against liability for a civil penalty if an individual is later found to be working illegally.

From 1 October 2026, the Right to Work framework changes in an important way, with new provisions addressing working arrangements beyond the traditional employer-employee relationship and introducing extended liability in certain non-direct contractual arrangements.

For SMEs, this makes it particularly important to understand who is working in or for your business, how they have been engaged and where responsibility for Right to Work compliance sits.

What is changing?

Historically, the statutory Right to Work scheme has centred primarily on individuals working under contracts of employment.

The changes form part of the government's move to extend Right to Work requirements into a wider part of the labour market. The government has specifically identified arrangements involving areas such as gig economy and zero hours working, including sectors such as construction, food delivery, courier services and warehousing.  From 1 October 2026 the scheme extends to workers (including casual and zero hours workers), individual subcontractors and people engaged through online matching services, as well as employees.

For businesses that rely on a mixture of employees and other workers, this means it is no longer enough to assume that Right to Work compliance begins and ends with the traditional employee onboarding process.

The updated framework also addresses non direct contractual arrangements and extended liability, making it important for businesses to understand the contractual relationships through which individuals are supplied or engaged.

What does this mean for SMEs?

The practical starting point is to understand your workforce.

Ask yourself:

·        Do we know who is carrying out work for our business?

·        How is each individual engaged?

·        Do we use Contractors, Subcontractors or Workers supplied through another organisation?

·        Who is responsible for completing the appropriate Right to Work checks?

·        Can we demonstrate that the correct checks have been completed where required?

·        Are follow-up checks identified and completed when an individual's permission to work is time limited?

·        Do the people responsible for recruitment and onboarding understand the current requirements?

This is particularly relevant for businesses whose workforce has evolved over time.

A company may have started with a small number of directly employed staff but now use a combination of employees, casual or flexible workers, contractors and external providers.

The greater the variety of working arrangements, the more important it becomes to establish exactly where your responsibilities lie.

Getting a Right to Work check right

Right to Work compliance is not simply about asking someone to provide evidence that they can work in the UK.

Employers need to follow the prescribed process applicable to the individual's circumstances. Home Office guidance sets out three prescribed methods: a manual document check, a Home Office online check using a share code and a digital check using a registered Right to Work Digital Verification Service Provider (the term now used in place of Identity Service Providers). The Employer Checking Service is used only in specific circumstances, such as certain outstanding applications. The Home Office re-published its updated employer's guide in draft on 11 September 2026 and it comes into force on 1 October. The June 2025 guide applies until then, so always follow the version in force on the day you carry out a check. From 1 October, an employer choosing a digital check must use a provider that is registered on the Office for Digital Identities and Attributes register as able to carry out right to work checks.

Where an individual's permission to work is time-limited, follow-up checks may also be required.

The process should therefore be consistent, documented and embedded within recruitment and onboarding, rather than handled as an informal administrative task. Checks should be applied consistently to everyone, not based on assumptions about nationality or appearance, as Home Office guidance on avoiding unlawful discrimination stresses. Employers should also keep a clear copy of the evidence checked, together with a record of the date the check was made, for the duration of the person’s employment or relevant working arrangement and for two years afterwards, after which it should be securely destroyed.

What about Contractors and Subcontractors?

This is an area where businesses need to be particularly careful about making assumptions.

The new rules should not simply be interpreted as meaning that every business must automatically carry out the same check on every person anywhere within its supply chain.

What matters is the nature of the working arrangement and contractual relationship.

The updated Home Office material specifically addresses direct contractual relationships with workers as well as extended liability in certain non-direct arrangements.

For SMEs that regularly engage workers outside standard employment relationships, this is therefore a good opportunity to review those arrangements and establish clearly who is responsible for compliance. Where extended liability applies, a statutory excuse is only available if the prescribed requirements are met before the work begins. These cover written contractual terms, substitution controls and identity verification. For worker’s contracts, individual subcontractors and relevant online matching arrangements, the expanded civil penalty provisions apply where the employment commences on or after 1 October 2026. For extended liability, the requirements apply to contractual arrangements entered into on or after that date.

Not every arrangement is caught. Genuinely self-employed individuals operating an independent business and contracting with their own clients or customers may fall outside the scheme. The Home Office guidance also gives an example of services being provided through an individual's own personal service company where the client company is not required to conduct a Right to Work check. Whether an arrangement falls within scope will depend on its facts and how it operates in practice.  Not every supply chain arrangement will create extended liability. Whether it applies depends on the structure of the contractual arrangements and how the work or services are provided in practice.

The cost of getting it wrong

The consequences of illegal working can go significantly beyond an administrative mistake.

Failing to manage Right to Work requirements appropriately can expose a business to civil penalties, operational disruption and reputational damage. Civil penalties can be substantial, with the penalty framework providing for £45,000 per illegal worker for a first breach and £60,000 per illegal worker for a repeat breach within three years, subject to the applicable penalty calculation and any reductions. The Home Office also notes that correctly completing prescribed checks can provide an employer with a statutory excuse against liability for a civil penalty where the relevant conditions are met.

For an SME, that makes prevention considerably better than trying to correct a problem after it has occurred.

Five steps SMEs can take now

With 1 October 2026 approaching, businesses should consider:

1. Review your workforce

Understand who works for and within your business and how each person is engaged.

2. Review your recruitment and onboarding process

Make sure Right to Work checks happen at the correct point and are not treated as an optional administrative step.

3. Review responsibilities

Establish who within the business is responsible for completing, recording and monitoring checks.

4. Review your records

Make sure you can demonstrate that the appropriate checks have been undertaken and identify any cases requiring follow-up action.

5. Review non-standard working arrangements

If you use contractors, subcontractors or other flexible arrangements, establish whether the changes affect those relationships and who is responsible for compliance.

Don't wait until there is a problem

Right to Work compliance is one of those areas that can appear straightforward until something goes wrong.

For SMEs without an in-house HR or compliance team, taking the time to review existing processes now can highlight gaps and provide clarity about what needs to change.

At ABZN Consultancy, we provide practical, commercially focused HR support to help SMEs strengthen their compliance processes and put the right foundations in place for growth.

Our Right to Work Compliance Review can help businesses assess their existing approach, identify potential gaps and understand the practical steps required to strengthen their processes. The checks themselves remain the employer’s responsibility, so my role is to support your business in getting its processes right, not to carry out checks on its behalf.

If you're unsure whether your current arrangements are ready for the changes taking effect from 1 October 2026, now is a good time to review them.

Is your business ready for 1 October?

Book a Right to Work Compliance Review to assess your current arrangements and identify any areas requiring action.

Email: info@abznconsultancy.co.uk

Book a consultation: www.abznconsultancy.co.uk

Protecting Businesses. Supporting People. Enabling Growth.

This article provides general HR information and is not legal or immigration advice. Businesses should refer to the latest Home Office guidance relevant to their individual circumstances. This article reflects the Home Office draft guidance published on 11 September 2026 and the draft Code of practice, as at 24 September 2026. Final versions may differ.