Reports that the Office of Tax Simplification (OTS) is to review over 1,000 tax reliefs and exemption is fuelling anxiety among contractors.

Contractors have always been able to use the tax system to maximum benefit, to help subsidise risks made in business and this talk of streamlining tax initiatives could potentially leave some contractors in a difficult financial situation.

John Whiting, tax director for the Office of Tax Simplification said that some people would be surprised at the number of the tax reliefs in place today.

 "Many have a clear and highly valued benefit so clearly we would not seek to change those. Others, however, may simply no longer be used, or are too complex and burdensome to be properly effective, so it is these that I want my team to focus on," he said.

This comes after news from Contractor Calculator that claims IT contractors are left in "legislative limbo" by the unclear criteria for the IR35 tax regulations.