Right to Work rules changed on 1 October 2026. UK businesses must now consider certain workers and individual subcontractors, not just employees. But who exactly needs checking, and what does this mean for small businesses?
If you employ staff, you’ll probably already know that you must check they have permission to work in the UK.
But what if someone isn’t an employee?
Perhaps you use casual workers, bring in a self-employed subcontractor to help complete a customer’s job, or engage individuals through another company.
The important change is that being self-employed, working outside your payroll or sending an invoice does not automatically remove the need for a Right to Work check.
The new requirements apply across industries, but they don’t mean every external contractor or supplier must be checked.
Here’s what small and medium-sized businesses (SMEs) need to know.
What Changed to Right to Work Checks on 1 October 2026?
Previously, the statutory Right to Work checking scheme mainly applied to employees.
From 1 October 2026, its scope was extended to include additional working arrangements.
The Home Office identifies four main categories:
- Employees: People employed under a contract of employment or apprenticeship.
- Workers: Individuals who personally undertake work or services under a qualifying worker’s contract.
- Individual subcontractors: Individuals contracted to provide work or services where another party has contracted with a third party to provide or arrange that work or service, but the individual hasn’t contracted with that third party.
- Online matching services: Certain businesses that provide details of individual service providers to potential customers.
For SMEs, the biggest practical change is that Right to Work responsibilities can now extend beyond the people you employ directly.
Do I Now Need to Check My Self-Employed Contractors?
You may need to, particularly where you engage individuals to personally carry out work or help fulfil contracts for your customers.
Let’s look at an example.
Your business wins a contract to provide a service to a customer.
You then engage an individual self-employed subcontractor to carry out part of that work.
The subcontractor invoices you and isn’t on your payroll.
Previously, businesses could assume that statutory checks were only required for employees.
Under the new rules, this type of individual subcontracting arrangement can require a Right to Work check before work starts.
However, there is an important distinction.
Not every self-employed contractor falls within the same legal category.
You must consider the actual contractual relationship and whether it meets the definition of a worker’s contract or individual subcontracting arrangement.
The simplest rule for SMEs is: If you engage an individual to carry out work, establish whether a Right to Work check is required before they start. Don’t rely on their self-employed status.
Who Needs Checking? Practical Examples
| Working arrangement | What should your business do? |
|---|---|
| You recruit an employee | Complete the prescribed Right to Work check |
| You engage someone under a worker’s contract to work casual shifts | Complete the prescribed check |
| You engage an individual subcontractor to deliver work under a qualifying subcontracting arrangement | Complete the prescribed check |
| You engage a self-employed individual to provide services | Assess the actual contractual relationship |
| You use agency workers or people supplied by another organisation | Consider the extended liability rules and relevant safeguards |
| You purchase independent professional services from another company | Not automatically a direct checking obligation, but assess whether workers are being supplied |
| A supplier delivers goods to your premises | An ordinary delivery does not automatically create a checking obligation |
Remember: Job titles, invoices and payment methods do not determine whether someone falls within the rules.
What’s the Difference Between an Individual Subcontractor and an Independent Consultancy?
This is where many businesses may understandably become confused.
Example 1: An individual subcontractor
A business agrees to provide work or services to a customer.
It contracts with an individual to carry out part of that work.
The individual has not contracted directly with the customer.
This may meet the Home Office definition of an individual subcontractor.
A prescribed Right to Work check may therefore be required.
Example 2: An independent consultancy company
A business engages an HR consultancy, accountant or IT company to provide its own professional services.
That company operates independently, and its employees deliver those services on its behalf.
This does not automatically mean the customer must carry out direct Right to Work checks on every employee of the consultancy.
However, businesses must also consider whether the arrangement involves individuals being supplied to provide work or services and whether extended liability provisions apply.
The important distinction is not simply whether another company is involved. It’s the nature of the contractual arrangement and who is providing or supplying the work.
What If Workers Are Supplied Through an Agency or Another Company?
Don’t assume that another company being involved means your business has no responsibilities.
The October 2026 framework includes extended liability provisions for certain contractual arrangements involving workers supplied through another employer or service provider.
Where these provisions apply, businesses may need appropriate contractual safeguards and systems to verify that the person carrying out the work is the person whose Right to Work has been checked.
The Home Office guidance explains how businesses may establish a statutory excuse against extended liability.
This can include:
- Appropriate written contractual terms in place before work begins.
- Arrangements to ensure the necessary Right to Work checks have been carried out.
- Proportionate processes to verify the identity of the person actually carrying out the work.
A contractual statement alone should not be assumed to provide complete protection. The relevant Home Office requirements must be satisfied.
If your business regularly uses agency labour or subcontracting chains, this is an area worth reviewing carefully.
Do the New Rules Apply to All Industries?
Yes. The legal framework is not limited to construction or any other particular industry.
It can be relevant to businesses in manufacturing, engineering, hospitality, retail, facilities management, professional services, charities and other sectors.
However, the legal requirements depend on the working arrangement, not simply the sector.
A business that only employs staff and already completes the correct checks may need little change.
A business that engages individual subcontractors, workers or people supplied through other organisations may need to review its procedures.
How Do You Carry Out a Right to Work Check?
The Home Office permits three prescribed checking methods, depending on the individual’s circumstances.
1. Manual document checks
Examine acceptable original documents using the Home Office’s prescribed procedure.
2. Home Office online checks
Use the official online service where the individual has an eligible immigration status.
3. Digital verification
Use an appropriately registered Right to Work digital verification service provider where permitted.
The correct check must be completed before the individual starts the relevant work.
Businesses must retain the required evidence and undertake follow-up checks where necessary.
Where someone’s immigration status cannot be confirmed through the usual process, the Home Office Employer Checking Service may be available.
For detailed instructions, refer to the Home Office Employer’s Guide to Right to Work Checks.
Right to Work Checks and Discrimination: What Employers Must Know
Right to Work checks are a legal responsibility, but they must always be carried out fairly and without unlawful discrimination.
You must not decide who needs checking based on someone’s nationality, name, skin colour, accent or appearance.
What should employers do?
- Apply checks consistently to everyone engaged under arrangements requiring them, including British and Irish citizens.
- Don’t check only individuals who appear to be from overseas.
- Don’t insist on a British passport where other acceptable evidence is available.
- Don’t require everyone to use the same checking method where the Home Office permits alternatives.
- Don’t automatically reject someone because they have an eVisa or time-limited permission to work.
- Do give individuals a reasonable opportunity to demonstrate their eligibility.
- Do consider the Employer Checking Service where appropriate.
A simple example
You recruit two people for similar roles.
One has a British-sounding name. The other has a name you associate with another country.
You ask only the second person to prove their Right to Work.
That could amount to unlawful discrimination.
The correct approach is to apply the relevant checking requirements consistently to both individuals.
Remember, British and Irish citizens have an unrestricted right to work in the UK, but they must still satisfy the appropriate checking process where one is required.
Right to Work checks are about establishing eligibility, not making assumptions about people.
For more information, see the Home Office Code of Practice on Avoiding Discrimination.
Can Small Businesses Be Fined for Illegal Working?
Yes. SMEs are not exempt from the legal requirements or potential penalties.
Civil penalties for illegal working can reach:
- £45,000 per illegal worker for a first breach.
- £60,000 per illegal worker for repeat breaches.
These are maximum penalty levels, not automatic fines for every administrative mistake.
Liability depends on the circumstances, including whether illegal working has occurred and whether the business can establish the relevant statutory excuse.
Completing the prescribed checks correctly is therefore important.
The aim is to check the right people, follow the correct process and protect your business.
Five Practical Steps for Small Businesses
You don’t need to create unnecessary paperwork. Start by reviewing your existing arrangements.
1. Look beyond your payroll.
Identify employees, workers, individual subcontractors and people supplied through other organisations.
2. Review the actual working arrangements.
Establish whether individuals are engaged under contracts covered by the extended Right to Work rules.
3. Check arrangements with agencies and service providers.
Where workers are supplied through another organisation, establish whether extended liability applies and what safeguards are needed.
4. Review your onboarding procedures.
Ensure the correct checks are completed before work begins, records are retained and any follow-up requirements are understood.
5. Brief your managers.
Anyone recruiting staff or engaging workers should understand the checking requirements and the importance of avoiding discrimination.
Frequently Asked Questions
Do I need to check every self-employed contractor?
No. The requirement depends on the actual working arrangement. However, qualifying individual subcontractors and people engaged under a worker’s contract are now covered.
What if my subcontractor invoices me?
Being paid by invoice doesn’t automatically create an exemption. You need to assess the contractual relationship.
What if I engage another company to provide services?
An ordinary business-to-business service arrangement doesn’t automatically create a direct obligation to check that company’s employees. However, consider whether the arrangement involves supplied workers and whether extended liability applies.
What if I use an employment agency?
You should establish the responsibilities under the arrangement and review the Home Office’s extended liability requirements. Don’t assume that the agency’s involvement removes every responsibility from your business.
Do British and Irish citizens need Right to Work checks?
Yes, where they’re engaged under a covered arrangement. Their unrestricted right to work doesn’t remove the requirement to follow the prescribed checking process.
Do I need to repeat checks on all existing employees?
Not simply because the rules changed. Existing employees may require follow-up checks where their permission to work is time-limited.
For existing non-employee arrangements, review the applicable commencement and transitional guidance before deciding whether additional checks are required.
Can I check only people who appear to be from overseas?
No. That could amount to unlawful discrimination. Checks must be applied fairly and consistently.
The Key Message for Small Businesses
Right to Work checks are no longer just about employees.
From 1 October 2026, businesses must also consider certain workers, individual subcontractors and arrangements involving people supplied through other organisations.
But that doesn’t mean checking every external supplier or independent consultancy.
Remember three things:
- Look beyond employees. Review individuals carrying out work under other contractual arrangements.
- Don’t assume self-employed means exempt. The actual legal relationship determines whether a check is required.
- Get the process right. Complete prescribed checks where required and apply them fairly, without discrimination.
A straightforward review now can help your business understand its responsibilities and reduce the risk of non-compliance.
How Can Craven Consultancy Services Help?
At Craven Consultancy Services, we understand that small businesses need practical, proportionate HR advice without unnecessary complexity.
Our HR consultancy team can help you:
- Understand how the October 2026 changes affect your business.
- Review employee, worker and subcontractor arrangements.
- Identify where prescribed Right to Work checks are required.
- Consider responsibilities when individuals are supplied through other organisations.
- Strengthen recruitment and onboarding procedures.
- Support managers in carrying out checks fairly and consistently.
Not sure whether your contractors or workers need Right to Work checks?
Contact Craven Consultancy Services for straightforward, practical HR advice tailored to your business.
Official Guidance
- Home Office – Employer’s Guide to Right to Work Checks (1 October 2026)
- Home Office – Employers’ Right to Work Checklist
- Home Office – Code of Practice on Preventing Illegal Working
- Home Office – Code of Practice on Avoiding Discrimination
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