Major changes to the UK’s Right to Work Scheme are due to take effect from 1 October 2026, significantly expanding the types of working arrangements potentially covered by the illegal working regime.
The changes are particularly important for businesses using workers, individual subcontractors, labour supply arrangements, substitution arrangements and certain online matching services.
They come at a time of increased Home Office enforcement activity against illegal working.
Businesses should therefore review their workforce and Right to Work procedures before entering into new working and contractual arrangements from 1 October 2026.
What is changing on 1 October 2026?
Section 48 of the Border Security, Asylum and Immigration Act 2025 amends the Immigration, Asylum and Nationality Act 2006.
Among other changes, it inserts new sections 14A and 15A into the 2006 Act.
In broad terms, references to employing an individual for the purposes of the illegal working regime will be extended to include:
- engaging an individual under a worker’s contract;
- engaging an individual subcontractor; and
- certain circumstances in which an online matching service provides details of an individual service provider to potential clients or customers.
The changes mean that businesses should no longer assume that Right to Work responsibilities are relevant only where somebody is engaged under a conventional contract of employment.
Why does this matter?
Employers can face substantial penalties for illegal working.
The civil penalty for employing an illegal worker can currently be as high as £45,000 per illegal worker for a first breach and £60,000 per illegal worker for a repeat breach.
There can also be criminal consequences where the requirements of the criminal illegal-working provisions are met, including where a person knowingly employs an individual who is disqualified from working because of their immigration status or has reasonable cause to believe that this is the case.
Conducting the prescribed Right to Work check correctly can provide an employer with a statutory excuse against liability for a civil penalty.
What is a worker’s contract?
For the purposes of the expanded scheme, a worker’s contract is broadly a contract, other than a contract of service or apprenticeship, under which:
- an individual undertakes personally to perform work or services for another person; and
- the other person is not a client or customer of a profession or business undertaking carried on by that individual.
A contract can be express or implied and oral or written.
Businesses should therefore consider the substance of the working relationship rather than relying solely on descriptions such as:
- self-employed;
- freelancer;
- contractor; or
- casual worker.
The label attached to an arrangement will not necessarily determine whether it falls within the expanded Right to Work Scheme.
What about individual subcontractors?
The changes are particularly relevant to businesses operating through subcontracting arrangements.
The legislation includes circumstances in which an individual enters into a contract with another person to provide work or services where that other person has itself entered into a contract with a third party to provide, or arrange the provision of, those work or services.
Depending upon the particular arrangement, the person engaging the individual subcontractor may therefore have Right to Work responsibilities.
Businesses using subcontractors should consider both who is actually performing the work and the contractual structure through which the work is provided.
What about online platforms?
Certain online matching services are also brought within the expanded regime.
This does not mean that every website, app or online platform facilitating services automatically becomes responsible for Right to Work checks.
Whether the provisions apply will depend upon the nature of the online service and the particular working and contractual arrangements.
The Home Office’s draft guidance due to take effect from 1 October 2026 contains examples designed to help businesses determine when an online matching service may fall within the scheme.
What is extended liability?
Another significant development is the introduction of extended liability through new section 15A of the Immigration, Asylum and Nationality Act 2006.
In specified circumstances, potential civil penalty liability can extend beyond the person who has the direct contractual relationship with the individual performing the work.
The Home Office’s September 2026 draft guidance identifies situations involving:
- contractual chains used to provide workers;
- certain online matching services; and
- arrangements allowing an individual to substitute another person to perform work or services.
However, extended liability should not be understood as simply transferring the direct employer’s responsibility for conducting a Right to Work check to another organisation.
The person with the direct contractual relationship remains responsible for carrying out the prescribed Right to Work check.
Other organisations potentially exposed to extended liability may need to comply with separate prescribed requirements to establish a statutory excuse.
Businesses may need to review their contracts
The changes are therefore not simply an HR issue.
The Home Office’s September 2026 draft guidance sets out detailed requirements concerning contractual arrangements where a business seeks to establish a statutory excuse against extended liability.
Depending upon the arrangement, this can involve appropriate written contractual terms dealing with matters such as:
- conducting prescribed Right to Work checks;
- further subcontracting;
- compliance with Right to Work requirements;
- auditing compliance; and
- action where illegal working is identified.
Businesses using labour supply chains, outsourcing or subcontracting arrangements should therefore consider whether their commercial contracts as well as their HR procedures need to be reviewed.
Substitution and identity verification
The expanded regime also addresses circumstances where the person whose Right to Work was originally checked may not be the individual who ultimately performs the work.
This is particularly relevant where contractual arrangements allow substitution.
The September 2026 draft Home Office guidance contains detailed recommendations concerning systems and processes designed to provide assurance that the person actually carrying out the work is the individual whose Right to Work has been checked.
Depending upon the circumstances, identity verification measures could include workplace identification, attendance systems or other proportionate processes.
The draft guidance also contains detailed recommendations concerning periodic identity re-verification.
Businesses should check the final Home Office guidance in force from 1 October 2026 before implementing procedures based upon these detailed recommendations.
Importantly, identity verification should not be confused with conducting a completely new immigration Right to Work check every time somebody attends work.
What happens to existing arrangements?
The transitional provisions are particularly important.
For employment under a worker’s contract, engagement as an individual subcontractor and relevant online matching arrangements, the expanded civil penalty provisions apply where the relevant employment commences on or after 1 October 2026.
There is a separate transitional position concerning extended liability.
The prescribed contractual requirements relevant to establishing a statutory excuse against extended liability apply where the relevant contractual arrangements are entered into on or after 1 October 2026.
Businesses should therefore avoid assuming either that every historic contractor arrangement automatically becomes subject to the expanded regime on 1 October or that all existing arrangements can simply be disregarded.
The particular arrangement and relevant dates need to be considered.
Sponsor licence holders should pay particular attention
Sponsor licence holders already have additional immigration compliance responsibilities.
Sponsors are required, as part of their sponsor duties, to check and retain evidence of the immigration status of workers they sponsor.
This applies irrespective of whether the particular arrangement would otherwise fall within the scope of the wider Right to Work Scheme.
For sponsor licence holders, Right to Work compliance therefore forms part of a wider compliance framework involving matters such as:
- record keeping;
- monitoring sponsored workers;
- reporting relevant changes to UKVI; and
- complying with the conditions and duties attached to the sponsor licence.
A Right to Work problem can therefore potentially have implications beyond the civil penalty regime.
Home Office enforcement activity has increased
The changes are taking place against a background of increased illegal-working enforcement.
Official Home Office figures show that between 1 January and 30 June 2026 Immigration Enforcement carried out 7,270 illegal-working visits, resulting in 4,756 arrests.
Compared with the same period in 2025, this represented:
- a 31% increase in visits; and
- a 20% increase in arrests.
Some sectors experienced particularly large increases in enforcement activity.
For example, the Home Office recorded 635 visits in the warehousing, distribution and delivery sector during the first six months of 2026, compared with 257 during the equivalent period in 2025.
Construction also saw 268 visits compared with 107 during the equivalent period in 2025.
The figures demonstrate why businesses should treat Right to Work compliance as an ongoing compliance issue rather than simply an administrative recruitment exercise.
Employers must also avoid discrimination
Businesses must ensure that Right to Work procedures are implemented fairly and consistently.
The Home Office has published a draft October 2026 Code of Practice dealing with avoiding unlawful discrimination while preventing illegal working.
Employers should not make assumptions about whether somebody has the Right to Work based upon characteristics such as their race, nationality or ethnic or national origins.
Businesses should ensure that their recruitment and Right to Work procedures are applied consistently.
What should employers do before 1 October 2026?
Businesses should consider reviewing:
- who actually performs work for the organisation;
- whether individuals are engaged as employees, workers, contractors or subcontractors;
- individual subcontracting arrangements;
- labour supply and outsourcing arrangements;
- contracts permitting substitution;
- arrangements involving online matching services;
- existing Right to Work procedures;
- responsibility within the organisation for conducting and recording checks;
- contractual provisions dealing with Right to Work compliance;
- identity verification procedures; and
- training provided to HR, recruitment and compliance staff.
Organisations operating through complex labour supply or contracting arrangements may require a more detailed review.
Do not rely simply on the label “self-employed”
One of the most important practical consequences of the new regime is that businesses should not assume that somebody falls outside Right to Work requirements simply because they are described as:
“self-employed”, “a contractor” or “a freelancer”.
The actual working and contractual arrangements will matter.
From 1 October 2026, businesses may therefore need to ask not simply:
“Is this person our employee?”
but also:
“Under what contractual arrangement is this individual personally providing work or services?”
The 1 October deadline is approaching
The expansion of the Right to Work Scheme represents an important change for UK businesses.
Employers that have historically limited Right to Work procedures to conventional employees should consider whether their systems remain adequate for new arrangements beginning from 1 October 2026.
Businesses using flexible workers, individual subcontractors, labour supply chains, substitution arrangements or online matching services should pay particular attention.
Employers should also check the final Home Office guidance and Codes of Practice applicable from 1 October 2026 when implementing their procedures.
How Atwal Law can help
Atwal Law advises UK businesses on Right to Work compliance, sponsor licences and UK immigration law.
We can assist employers with reviewing Right to Work procedures, sponsor compliance systems and workforce arrangements in preparation for the changes taking effect from 1 October 2026.
Businesses using contractors, subcontractors or flexible working arrangements may particularly benefit from reviewing whether the expanded Right to Work Scheme affects their existing compliance procedures.
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