The Home Office has laid secondary legislation before Parliament that is expected to significantly expand the scope of the UK Right to Work (RTW) Scheme from 1 October 2026. Alongside the legislation, the government has published an updated draft Codes of Practice. Publication of an updated Employer's Guide to RTW Checks is expected following stakeholder review. The changes form part of the government’s efforts to strengthen enforcement against illegal working.1,2,3
WHY THIS MATTERS
These changes, when effective, will [KGS1.1][SA1.2]broaden compliance obligations for businesses that engage workers outside traditional employment relationships, including through contingent labour and subcontracting models. Employers may face additional administrative, contractual, and process review requirements when determining who and which business arrangements are in scope, and how potential liability may operate across business arrangements.
Key Highlights
RTW obligations and civil penalties for non-compliance will extend beyond traditional employment relationships to cover businesses that contract workers or engage individual subcontractors to provide services under their company name.
The expanded regime is expected to include:
- Workers engaged under a worker's contract;
- Individual subcontractors; and
- Certain online matching services.
Changes to Digital Verification
If organisations choose to use a digital verification service provider (DVSP) to conduct RTW checks, then these checks are required to be carried out by a government-registered provider
Extended Civil Penalty Liability
Responsibility for carrying out RTW checks will generally sit with the party that has the direct contractual relationship with the worker. However, liability may extend through contractual chains where prescribed requirements are not met, creating additional compliance risks for businesses that engage contingent labour or subcontracted workers.
Compliance Risk
- Civil penalties for illegal working remain substantial and can reach up to £60,000 per worker.
- Organisations should, therefore, understand where workers are engaged across their labour supply chains and implement appropriate compliance controls.
Establishing a Statutory Excuse Against Extended Liability
To rely on a statutory excuse against extended liability for a civil penalty, organisations would need to demonstrate they are compliant with all prescribed requirements:
- Contractual terms and conditions (written statement);
- Substitution controls; and
- Identity verification systems and processes.
KPMG LLP (U.K.) INSIGHTS
In light of the changes, organisations might wish to consider the following:
- Identifying all groups who may fall within the expanded scope of the RTW Scheme.
- Reviewing supply chains and contractual arrangements to understand compliance responsibilities and potential liability.
- Identifying when prescribed written statements may be required under the new framework and starting discussions with relevant agencies, suppliers, contractors, and other parties.
- Updating RTW check procedures, policies, and record-keeping processes.
- Confirming that any digital verification service providers (DVSPs) used are registered with the government.
- Raising awareness of the changes among relevant HR, procurement, legal, and operational stakeholders.
- Monitoring further Home Office guidance, including the updated Employer's Guide to Right to Work Checks.
If assignees and/or their programme managers have any questions or concerns about the scope of the policy update, its application and potential impacts, and appropriate next steps, they should consult with their qualified immigration professional or a member of the Immigration team with KPMG in the United Kingdom (see the Contacts section).
ENDNOTES:
1 GOV.UK, “Extending the Right to Work Scheme,” published on 29 October 2025, last updated on 30 June 2026.
2 GOV.UK, “Draft code of practice on preventing illegal working: Right to Work Scheme for employers,” published on 1 July 2021, last updated on 30 June 2026.
3 GOV.UK, “DRAFT: Employer’s guide to right to work checks,” published on 16 July 2026.
Contacts
Disclaimer
* Please note the KPMG International member firm in the United States does not provide immigration or labour law services. However, KPMG Law LLP in Canada can assist clients with U.S. immigration matters.
The information contained in this newsletter was submitted by the KPMG International member firm in the United Kingdom.
GMS Flash Alert is a Global Mobility Services publication of the KPMG LLP Washington National Tax practice. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.
© 2026 KPMG LLP a U.K. limited liability partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.