Chancellor George Osborne needs to be "decisive" on the issue of IR35 this week, accountancy firm RSM Tenon has said.

Andrew Hubbard, chair of tax at the company, said it is "simply not acceptable" to do nothing about the issue, which will significantly affect contractors and freelancers.

"It is important that he indicates whether IR35 will be suspended or if improvements will be made to the way in which it is administered whilst the idea of merging the PAYE and NIC systems is considered in the long term," he added.

Mr Hubbard went on to say that a commitment to reduce the tax burden on the middle classes would be welcomed, saying the UK's entrepreneurial spirit is in danger from the 50 per cent tax band.

Paul Belsman, head of tax at RSM Tenon, recently echoed calls for "clarity and direction" on IR35 when the Budget is delivered.