Right to Work checks from 1 October 2026: what changes for small employers

For most of the last twenty years, a UK employer's Right to Work duty had a simple boundary: it applied to people you employed. If someone was on a contract of employment you checked them before they started, kept a copy, and had a defence if they turned out not to have the right to work. If they were anything else — a sub-contractor, a casual, someone picking up shifts through an app — the duty did not reach them.

On 1 October 2026 that boundary moves. Section 48 of the Border Security, Asylum and Immigration Act 2025 extends the Right to Work Scheme to three further kinds of working arrangement, and the commencement date is fixed in secondary legislation rather than left to guidance.

What actually changes on 1 October 2026

Section 48 inserts a new section 14A into the Immigration, Asylum and Nationality Act 2006. Rather than writing a new set of duties, it widens who the existing ones apply to: in sections 15 to 24 of that Act, a reference to a person employing another person now also includes engaging someone under a worker's contract, engaging an individual sub-contractor, and operating as an online matching service.

That drafting choice matters, because it means the mechanics you may already know are unchanged. The same three prescribed checks. The same statutory excuse if you carry one out properly. The same penalty regime. What has grown is the population of people you owe the duty to.

The four arrangements now covered

These are the categories as the legislation describes them. Only the first was in scope before.

Does this apply to your business?

This is the question worth getting right, and the answer does not depend on your industry. It depends on the shape of the arrangement. The statutory definition of a worker's contract has two limbs, and the second is the one that decides most real cases: a worker's contract is one where the individual undertakes to do the work personally, and where “person A is neither a client nor customer of any profession or business undertaking carried on by individual A”.

Read that second limb the other way round and it becomes a practical question you can actually answer: are you genuinely just one of this person's customers? If they run their own business, serve other clients, and you are one of them, the arrangement sits outside the scheme. If you are effectively who they work for, it does not — whatever the paperwork calls them.

The draft guidance is explicit that people running their own businesses are not the target: “This guidance will not generally apply to individuals who are operating an independent business either in their own name or through their own company and who contract directly with clients or customers for the provision of goods or services.”

But it is equally explicit that you cannot settle the question with a job title or an invoice: “The label applied to an arrangement, including whether an individual is described as ‘self-employed’, will not be determinative.” What counts is how the work is arranged, supplied and performed in practice. Two salons can describe their stylists identically and land on opposite sides of the line.

The sectors the government named — and why they are not the test

The government's response to the consultation says the Act extends the scheme to businesses hiring gig economy and zero-hours workers “in sectors like” construction, food delivery, beauty salons, courier services and warehousing.

Those five are worth knowing because they tell you where enforcement attention is likely to go, and because most people in them will recognise themselves immediately. But the phrase is “in sectors like” — it is an illustration, not a list of who is caught. Scope comes from section 48. A construction firm that directly employs everyone on site has nothing new to do; a bookkeeping practice with one self-employed associate who only works for them might.

What you have to do

For anyone in scope, a prescribed check has to be completed before they start the work. A check done afterwards does not give you a statutory excuse for the period before it. There are three accepted routes, and you only need one of them.

• A manual document-based check. Obtain the original documents from List A or List B, check them in the person's presence (or over a live video call while holding the originals), and keep a clear copy with the date you checked.
• The Home Office online check. Use the person's share code and date of birth on the Home Office service, and keep the response it produces.
• A check through a registered digital provider. Use a Right to Work Digital Verification Service Provider. If you choose this route the provider must be registered on the OfDIA register and able to provide right to work checks.

For most small employers the Home Office online service is the path of least resistance where the person has a share code — it is free, it produces a response you can keep, and it removes any argument about whether you examined a document correctly. Manual checks remain valid and are still necessary for people whose status cannot be checked online.

What records you have to keep

Keeping the evidence is not an administrative afterthought — it is the statutory excuse. If you cannot produce it, you carried out a check that does not protect you. The draft guide puts the retention rule this way:

“ensure all copies of documents are kept securely for the duration of the worker's employment and for two years afterwards. The file must then be securely destroyed.”

Two years after the engagement ends, then secure destruction. For an employer using seasonal or intermittent labour that is the part most likely to go wrong: the check gets done, and the evidence lives in a phone camera roll or an email thread that nobody can find two years later.

Existing workers and contracts: what you do not have to do

This is the part most coverage of the change buries beneath the penalty figure, and it is the first thing an SME actually wants to know. You are not expected to go back through everyone already working for you. The draft code of practice says:

“In relation to employment under a worker's contract, as an individual sub-contractor or in the case of an online matching service providing the details of a service provider to clients or customers, a civil penalty may only be imposed where the employment commenced on or after 1 October 2026.”

So for the three new categories, liability attaches to engagements that begin on or after 1 October 2026. Existing arrangements that started before then are not retrospectively caught. That does not make a retrospective check wrong — some employers will want one for their own comfort — but it is a choice, not a duty, and if you do it you have to apply it consistently rather than to people you have picked out.

What happens if you get it wrong

The penalty regime is not changing on 1 October 2026. What changes is who can be treated as an employer for the purposes of it. The figures are the same in the code of practice in force today and in the June 2026 draft:

• £45,000 per worker as the starting point for a first breach.
• £60,000 per worker as the starting point for a repeat breach, meaning one within 3 years of a previous penalty or warning notice.

The word doing the work there is starting point. The code sets these as the beginning of a calculation, not the invoice: reductions of £5,000 per worker apply for reporting suspected illegal working, and again for co-operating with the Home Office. On a first breach, an employer who reports, co-operates and has effective checking practices may receive a warning notice instead of a penalty. Reporting a flat “£60,000 fine” overstates it in one direction, and ignoring that this is per worker understates it badly in the other.

Is there a grace period?

No dated one has been announced, and it is worth being precise about this because it is easy to read more comfort into the government's words than they contain. Respondents to the consultation asked for a long lead-in. The government's response commits to “allow sufficient time before any new requirements come into force” — an intention, not a period. The commencement regulations set 1 October 2026 with no transitional window attached.

The protection that does exist is the one above: the new categories bite only on engagements starting on or after that date. Treat that as the concession, and treat 1 October 2026 as a hard date.

How to prepare, if you have a few weeks

None of this needs a project plan. For a business with a handful of arrangements it is an afternoon.

• List everyone who does work for you who is not on your payroll. Casuals, regulars who invoice, chair renters, sub-contracted trades, anyone you found through a platform.
• For each one, answer the two limbs. Do they have to do the work personally? Are you genuinely just one of their clients? The scope checker does this with you.
• Decide who does the check, and how, for new engagements from 1 October 2026. In a small business this is usually one named person and the Home Office online service — the failure mode is nobody owning it, not choosing the wrong route.
• Decide where the evidence lives before you have any, with the two-year retention rule in mind.
• Write down what you decided. A consistent, documented process is what “effective checking practices” means when it matters.

What is still draft, and what to watch

Being straight about the status of each document here matters more than sounding certain:

• Settled: the 1 October 2026 commencement date, and the statutory wording of section 48 and new section 14A.
• Draft: the employer's guide dated 16 July 2026 and the code of practice dated June 2026. Both state that they come into force on 1 October 2026. The 26 June 2025 employer's guide and the 13 February 2024 code remain the versions in force until then. Almost everything in this guide about how the new duties will be applied in practice — including the treatment of independent businesses — comes from those drafts and could change.
• Worth re-reading when final: the exact structure of the online matching service definition, and the worked examples on contractual chains. If you sit in a multi-layered sub-contracting chain, that detail decides who carries the duty, and the draft describes the Home Office's enforcement approach rather than a statutory allocation of liability.

Nothing in this guide is legal advice, and it cannot see your contracts. Where an arrangement matters commercially, the cost of an hour with an immigration solicitor before 1 October 2026 is small next to a penalty calculated per worker.

Where MadyHR.ai fits

We build HR and sponsor-compliance software for UK SMEs, so it is worth being clear about which part of this we can and cannot help with.