What might a mandatory Brit card mean for SMEs?

The Labour government has confirmed plans to introduce a mandatory digital identification system, dubbed the “Brit card,” for people working in the UK. The move, announced on 25 September, is positioned as a tool to curb illegal employment, though its practical impact will fall heavily on employers — particularly small and medium-sized enterprises (SMEs).

Under the proposal, all individuals with the legal right to live and work in the UK — including British and Irish citizens, residents with indefinite leave to remain, and those holding valid visas — would be issued a digital ID free of charge. Designed primarily as a smartphone-based credential, the system would also provide a physical card for those unable to access digital devices. Employers would be required to check the ID of new hires using an official verification app or scanner.

The government has argued that the scheme will reduce illegal working, remove opportunities for fraud, and speed up right-to-work checks. Prime Minister Keir Starmer has described the card as an “enormous opportunity” to strengthen border controls and reduce exploitation in the workplace. A consultation and legislative process will follow, with full rollout expected by 2029.

Industry response has been mixed. Privacy groups such as Liberty and Big Brother Watch have raised concerns about civil liberties, potential mission creep into other areas of life, and the security of centralised databases. Technology experts warn that digital IDs present a valuable target for cyberattacks if not carefully designed. At the same time, business groups have highlighted potential efficiencies, particularly for companies without large HR teams.

For SMEs, the introduction of Brit cards could bring both advantages and challenges. On the positive side, the system promises to streamline identity checks and reduce the risk of inadvertent non-compliance with immigration law. Instead of handling passports, visas, and paper-based records, employers could validate eligibility with a single digital process. This may cut administrative overhead and reduce the risk of document forgery.

However, smaller businesses may face new compliance costs. Adopting verification tools, training staff, and ensuring reliable access to the system could present a burden, particularly in sectors with high staff turnover. Connectivity issues and reliance on central government systems also raise concerns. If the platform experiences downtime or technical failures, SMEs may find themselves unable to onboard staff quickly.

Questions also remain about how the scheme will accommodate edge cases. Workers without smartphones, people in precarious housing, or those with unsettled immigration status may struggle to obtain or use the ID. SMEs in care, hospitality, and seasonal work could find hiring disrupted if the system is not flexible. There is also uncertainty over how existing employees will be treated — whether a retroactive check will be required, or if the system applies only to new hires.

Civil liberties debates will continue, but for employers the key issue will be practicality. The balance between streamlining compliance and imposing new burdens will determine whether the Brit card feels like an opportunity or an obligation. For now, SMEs are advised to watch the consultation process closely, prepare for potential system integration, and engage through trade associations to ensure their interests are represented.