Right to Work Checks Expanded: What the New Rules Mean for UK Contractors

A significant compliance change came into force on the 1st of October 2026, extending the UK’s Right to Work regime beyond conventional employees and into parts of the contractor, subcontractor and flexible-workforce market.

For businesses using contractors, recruitment agencies and individuals working through non-standard arrangements, this is an important development. Updated Home Office guidance confirms that prescribed Right to Work checks can now apply not only to employees, but also to individuals working under a worker’s contract and individual subcontractors.

For professional contractors, the change doesn’t mean that every limited company contractor suddenly becomes an employee. It does, however, mean identity and Right to Work compliance may become a more visible part of onboarding.

What changed on the 1st of October 2026?

Historically, the Right to Work regime has been most closely associated with traditional employment.

The scope has now widened.

The Home Office’s updated checklist states that prescribed checks must be carried out before work begins for individuals engaged under:

• a contract of employment;
• a worker’s contract; or
• an arrangement as an individual subcontractor.

The regime also extends into certain online matching/platform arrangements.

The government’s updated employer guidance and Code of Practice both took effect on the 1st of October 2026.

For contractor supply chains, this means clients and agencies need to understand precisely who they are engaging and whether the new checking requirements apply.

Does this apply to limited company contractors?

This is where contractors should avoid overly broad interpretations.

The new rules do not simply say that every individual providing services through a limited company must automatically undergo the same process.

Different arrangements can have different consequences.

The Home Office guidance specifically identifies an individual subcontractor as falling within the prescribed checking regime. Contractor arrangements involving companies, agencies, workers and genuinely independent businesses can be structured differently.

For contractors, therefore, the practical message is to expect clients and agencies to look more carefully at engagement structures and potentially request additional information during onboarding.

It is also another reason why accurately documenting the commercial relationship matters.

Right to Work is not the same as IR35

An important distinction needs to be made.

Right to Work compliance and IR35 are separate legal issues.

Right to Work rules concern whether an individual is legally permitted to undertake work in the UK and whether the engaging organisation has carried out the required checks.

IR35 and the off-payroll working rules concern employment status for tax purposes where services are supplied through an intermediary.

HMRC confirms that IR35 applies where an individual providing services through their intermediary would have been an employee for tax purposes if they had contracted directly with the client.

A client carrying out a Right to Work check therefore does not, by itself, mean that a contractor is inside IR35.

Equally, an outside IR35 determination doesn’t remove any Right to Work obligations that may independently apply.

Could onboarding take longer?

Potentially.

Contractors are accustomed to providing information before beginning assignments, particularly where recruitment agencies are involved.

The new regime may add another compliance step for some engagements.

Clients and agencies may consequently review onboarding procedures, contractual wording and supply-chain responsibilities.

Contractors can help minimise delays by responding promptly to legitimate information requests and ensuring that documentation is current.

However, contractors should also understand why information is being requested rather than assuming every compliance request relates to IR35.

Another reason to review your contract properly

The expansion of Right to Work checks illustrates a wider trend in contracting: supply-chain compliance is becoming increasingly important.

Before beginning an engagement, contractors should understand who the contractual parties are, what obligations they are accepting and whether the written agreement reflects how services will actually be provided.

This is particularly relevant to IR35.

For medium and large private-sector clients and public-sector bodies, the client will generally be responsible for determining employment status under the off-payroll rules. HMRC requires clients to take reasonable care when making that determination.

An IR35 Status Review can help contractors understand whether contractual provisions and working practices support the intended status and identify areas that may need clarification before the engagement begins.

Don’t confuse compliance with employment status

Contractors may understandably become concerned if a client begins asking for information that previously wasn’t required.

But administrative compliance shouldn’t automatically be interpreted as evidence of employment.

Government guidance itself recognises that a contractor can be self-employed, have worker status or, in some circumstances, be an employee.

Employment status depends on the actual legal and working relationship.

For IR35 purposes, contractors should continue concentrating on the relevant status factors and ensuring that the reality of the engagement is consistent with the contractual position.

Managing the wider risks of contracting

Increasing compliance requirements make good business risk management even more important.

Professional Indemnity Insurance can provide protection against covered allegations arising from professional errors, omissions or negligence.

Public Liability Insurance addresses separate risks involving third-party injury or property damage, while Employers’ Liability Insurance may be required depending on a contractor company’s circumstances.

Separately, IR35 Insurance can provide specified protection against the financial consequences of a covered HMRC IR35 investigation.

These protections address different risks and should complement rather than replace robust contracts and good compliance procedures.

What should contractors do now?

For most contractors, there is no reason for alarm.

Instead, the change should be treated as another part of an increasingly compliance-focused contracting environment.

Be prepared for additional onboarding questions. Understand which entity is engaging you. Keep documentation current. Make sure your contract accurately reflects the commercial relationship.

And, crucially, don’t assume that a Right to Work check determines your IR35 status.

The two regimes answer fundamentally different questions.

For contractors entering new assignments this autumn, understanding that distinction could help prevent unnecessary confusion while ensuring engagements start on the right footing.