The government is right to clamp down on tax avoidance using the Employee Benefit Trusts (EBTs), according to one expert.

Umbrella company chief and Parasol founder Rob Crossland said that compliant umbrella companies have nothing to fear from the changes.

"Some providers of services to contractors have taken the announcement as an opportunity to release misleading information and confuse the market," he said.

"This is inaccurate, irresponsible and fundamentally wrong."

Mr Crossland added that compliant umbrella companies should be differentiated from those that "exploit loopholes and make bold or unrealistic claims about take home pay".

This follows news that contractors using EBT tax avoidance schemes are likely to find themselves subject to taxation and National Insurance Contributions due to new laws to be implemented in April.

The Employment Income through Third Parties amendment to the Earnings and Pensions Act will tackle disguised remuneration and is consequently likely to affect those using trusts and financial tax avoidance vehicles.