The new Agency Workers Regulations (AWR) could prove too expensive for small umbrella companies, one expert has said.

Dave Chaplin, chief executive officer of contractorcollective.com, said that although the exact implications of the new AWR cannot be predicted, most experts agree that it will bring extra costs and administration.

"No one yet knows how big the problem could be, or even if it is going to be a problem," he said.

"But for many small umbrella companies, AWR could well be too expensive for them to deal with."

Mr Chaplin explained that some contractors are worried that limited company contractors will be automatically excluded from the legislation. However, he said that only limited company contractors "genuinely in business" will find themselves left out.

This discussion came at an event hosted by Parasol and Recruiter Magazine which invited experts to discuss the situation.