The UK’s new digital ID cards – a guide to “Brit Card” compliance for SMEs

In September, Prime Minister Keir Starmer announced plans to introduce the “Brit Card” – a digital identity credential for UK citizens to prove their identity (e.g. name, date of birth, residency status, etc) via a smartphone app.

The scheme was proposed to tackle illegal working and immigration abuses, while making it easier for people to access the services they are entitled to.

For businesses, this is set to significantly change the recruitment process, particularly with how they run right-to-work checks and onboarding systems.

And while the digital ID scheme promises to streamline the hiring process, the transition will understandably be daunting for businesses – especially with new systems, training, and compliance to get to grips with.

Below, we’ll break down what the new digital IDs are, how they will impact business operations, and the steps you can take to prepare your team and stay compliant.

What is a UK Digital ID?

The UK’s digital ID (also known as the “Brit Card”) is a proposed scheme that would allow citizens to prove their identity through a smartphone app.

If the plans go ahead, digital IDs will be issued free of charge to those with the legal right to live and/or work in the UK (e.g. UK/Irish citizens, those with settled or pre-settled status, visas, etc.).

The government’s press release states that the scheme was introduced to “help combat illegal working”, preventing those living in the UK illegally from getting work. According to reported statistics, illegal working arrests have increased by 51% in the last 12 months, leading up to July 2025.

It also added that the digital ID cards will make it easier for legal citizens to use government services, including driving licenses, childcare, and welfare.

When will it come into place?

The digital ID will be rolled out for right-to-work checks by the end of the current parliament, which is expected to be no later than August 2029.

However, the government has already introduced digital identification systems in other areas of running a business.

Most notably, from November 2025, it will be mandatory for new directors and people with significant control (PSCs) to verify their identity before incorporating a limited company through Companies House.

How will digital ID verification work in practice?

As part of this scheme, digital IDs will be mandatory for right-to-work checks.

This means that employers will need to check a candidate’s Brit Card before hiring, with each check automatically logged and shared with the Home Office. This would allow the government to monitor compliance and ensure businesses are following the rules.

Here’s a quick breakdown of the likely scenario:

• Onboarding stage: when a candidate accepts the job offer, the employer will ask them to verify their identity and right to work using their Brit Card instead of physical documents (e.g. passports).
• Digital verification: the employer uses a secure verification app or portal (linked to the Home Office or government system) to scan or request the candidate’s digital ID details. The system will then confirm whether they have the legal right to work in the UK.
• Automatic record creation: once the check is done, a digital record of the verification is automatically created and shared with the Home Office – acting as proof that the employer completed the right-to-work check correctly.
• Compliance tracking: the Home Office can then use those records to monitor compliance, such as ensuring businesses are hiring legally and carrying out all necessary checks.

Beyond employment, digital IDs would most likely be needed to open a business bank account through the “Know Your Customer” (KYC) processes, or to access financial services that require identity verification, such as applying for a business loan.

How will the new ID cards impact small businesses?

For small businesses, the Brit Card could be a bit of a mixed bag.

On the one hand, it’s designed to make verifying an employee’s right to work faster and more secure, but there are likely to be challenges coming along, too. 

Here are the ways they can impact a business:

• Faster right-to-work checks: employers will be able to confirm an employee’s identity and right to work instantly through the digital system, in turn cutting down on admin time and the need to handle or store physical documents.
• More admin at first: while the process is meant to be more speedy, small businesses might first need to update their hiring processes and train their human resources (HR) team to use the new verification process.
• Tech and system updates: employers may need to get new HR software or integrate their existing systems with the government’s verification platform – a significant challenge for businesses with limited IT support.
• Hiring delays: if the Brit Card becomes the only accepted form of ID, businesses might face delays hiring overseas, temporary, or seasonal workers who haven’t yet been issued one – a particular problem for industries like healthcare, construction, and hospitality.
• Connectivity issues: the reliance on digital technology means that if the government’s platform crashes or has a technical problem, SMEs will likely struggle to onboard staff quickly.
• Uncertainty for existing employees: it hasn’t been clarified whether this new process will apply to existing employees through a retroactive check, or just for new workers.

How should small businesses prepare for UK digital ID checks?

The new digital ID might seem like a long way off. However, it’s still important for small businesses to prepare so that they can avoid surprises or last-minute headaches, as well as remain compliant when the scheme launches.

1. Understand the requirements

The Brit Cards might not yet be enforced, but as the expected rollout comes closer, you should keep up to date with government guidance and right-to-work checks. 

It’s also important to note that not all roles require a right-to-work check. For example:

• Self-employed contractors: as sole traders and self-employed individuals are responsible for their own taxes and National Insurance Contributions (NICs), they do not need a right-to-work check.
• Volunteers and unpaid workers: volunteers or those doing work experience without pay do not require verification, unless they are a voluntary worker (someone who is under an employment contract).
• Advisory/non-employed roles: consultants or board members who are not formally employed by the company, and are paid through invoices rather than a payroll.

2. Update your systems and tools

Make sure that your current HR or payroll software can handle digital verification. You might find that the software you have now may need updates or integrations to handle the new verification process, so it’s worth checking early.

It’s also a good idea to explore the verification platforms approved by the government. This will help you to figure out which ones work best for your business, and how they’ll fit into your existing workflow.

3. Train your staff

It’s crucial that your HR team are up to speed, so you should make sure that anyone involved in hiring or onboarding knows how to use the new digital ID system and understands the steps for verifying a candidate’s identity.

You should also keep the General Data Protection Regulation (GDPR) in mind by training staff on data privacy and handling sensitive information safely with this new system. That way, you’ll avoid mistakes later and make the whole process smoother when the Brit Card becomes a part of the hiring process. 

The future of work in the UK: a digital-first approach

While the digital ID is likely to cause some commotion for business operations, it could also make identity and right-to-work checks faster and more secure in the long run.

For many employers, the idea of shifting from physical documents to a digital-only system might feel like yet another admin change to deal with. 

But once the dust settles, digital IDs have the potential to simplify hiring, remove paperwork, and reduce the back-and-forth process that slows down onboarding. This is especially useful for remote or hybrid working roles, where it can be difficult to verify documents in-person. 

Moreover, as digital IDs can reduce document forgery and manual errors, businesses may feel more confident in the legitimacy of their new hires.

Still, like any major change, there are two sides to the story. 

Digital IDs may bring obvious benefits, but they also raise valid concerns around accessibility (e.g. for older workers or those without a smartphone) and the impact of hiring overseas workers who don’t yet have one, especially as they’re expected to become mandatory for hiring new employees.

And it’s impossible to ignore the privacy and security concerns as well. Because the digital ID holds personal details (e.g. name, date of birth, residency status), there are risks around data breaches, misuse, or over-centralisation of data. 

Alan Woodward, a professor and cybersecurity expert at the University of Surrey, told The Guardian: “[the digital ID] is painting a huge target on something to say ‘come hack me’”.

Conclusion

The UK’s move towards a digital ID system marks a big shift in how identity and right-to-work checks will be handled – reshaping hiring, onboarding, and compliance for years to come.

And while this transition may feel daunting for small businesses – especially with the extra training, tech changes, and early admin involved – the long-term gains could be worth it.

That being said, the rollout won’t be without its challenges. Businesses will need to plan ahead, offer support to workers who may struggle with digital access, and be aware of data privacy risks.

The solution is simple: stay informed and start preparing early. Those who adapt over time will find the change much easier, and may even benefit from it sooner than expected. 

Getting prepared now will help small businesses ensure they’re not just keeping up, but also using this change to their advantage.