Expansion of Right to Work Checks – Implications for Tax & Mobility

At a glance summary

• RTW checks currently required for employees and sponsored workers only (May 2026 guidance update)
• Major expansion coming from October 2026, checks likely to extend to contractors, casuals and other non-employees
• Wider definition of “employer”: Will capture flexible and non-standard engagements common in universities
• Tax relevance increases: Overlap with IR35/off-payroll rules, employment status, and PAYE/NIC treatment
• Global mobility impact: RTW checks become a key front-end control alongside immigration permission and business visitor tracking

Overview

Recent UKVI updates provide short-term clarity on right to work (RTW) checks, but the longer-term direction is towards a significant expansion of compliance obligations. This will have implications not just for HR, but for tax, payroll and global mobility teams.

Current Position

Updated sponsor guidance (20 May 2026) confirms that universities must currently carry out RTW checks for:

• All employees (whether sponsored or not)
• All sponsored workers (even if not employees)

Earlier proposals to extend checks to “directly engaged” non-employees have been rolled back, providing temporary stability.

What’s Changing

The Border Security, Asylum and Immigration Act 2025 introduces a broader definition of “employer”, extending RTW requirements beyond traditional employment.

Expected from 1 October 2026 (subject to confirmation), RTW checks will apply to:

• Casual and zero-hours workers
• Contractors and subcontractors
• Individuals engaged through personal service or platform arrangements

This reflects a shift towards aligning immigration compliance with modern labour models.

Why This Matters for Tax and Global Mobility

1. Alignment with Employment Status and IR35

The expanded RTW regime captures individuals who may currently sit outside traditional employment for tax purposes, including:

• Off-payroll workers (IR35 scope)
• Self-employed individuals
• Short-term contractors

This increases the need for joined-up compliance between immigration status and tax/employment status determinations.

2. Impact on Casual and International Engagements

HEIs frequently engage:

• Visiting academics and overseas experts
• Casual teaching staff and student workers

These groups may already require an employment status check for tax and employment rights purposes, PAYE/NIC assessment, taking into consideration any tax treaty and social security analysis. Now, RTW checks will need to be embedded alongside these processes.

3. Increased Compliance Risk

Failure to carry out compliant RTW checks removes the statutory defence against illegal working penalties. Under the expanded regime there is the right to issue penalties of up to £60,000 per worker.

4. Systems and Data Integration

Institutions will need stronger alignment across their HR, payroll and tax systems (including any global mobility tracking) to ensure consistence classification and audit trails for compliance purposes.

Practical Considerations for BUFDG Members

Tax and mobility teams should begin to:

• Map all categories of individuals providing services (employees and non-employees)
• Identify where RTW obligations may extend under the new regime
• Review alignment between RTW processes, off-payroll (IR35) determinations and payroll treatment
• Ensure governance frameworks cover casual, visiting and internationally mobile populations
• Work with HR to prepare for increased volume and complexity of checks

Key Takeaway

While current rules remain unchanged, the policy direction is clear: RTW compliance is expanding to cover a much wider workforce, and you should start to embed processes now rather than wait until the last minute.

For universities, this will require closer integration between immigration, tax, payroll and global mobility functions, with RTW checks becoming a critical element of wider workforce compliance.