Recruiters have been warned to review their Contractor Compliance Protocols in case any of their UK placements are caught by new legislation.

The new legislation may prevent them from using artificial arrangements such as Employee Benefit Trusts (EBTs). Nyman Linden Chartered Accountants says such arrangements are particularly rife in the banking and financial sectors – to reduce or defer their income tax liabilities.

The firm warns that although this new legislation is formally introduced from 6 April, it is already active because any ‘loans’ received after 9 December will not escape a liability for income tax and agencies could be exposed to third-party debt.