City banks and other employers face an administrative nightmare because of the “mind-bogglingly complex” new tax rules for non-domiciled staff working in the UK, peers and business organisations warned ­on Monday.

The CBI told the FT it had sounded the alarm with the Treasury over the problem. But Mike Templeman, a member of the CBI’s tax committee and consultant to Schroder Investment Management, warned: “There may not be a solution ... this is a potentially serious worry for employers in the City.”