IR35 tax legislation, much-maligned by IT contractors, has received stinging criticism from the Institute of Directors (IoD).

The trade association believes that far from being the solution to the problem of disguised employees avoiding tax, it has itself become the problem.

It it's therefore imperative that IR35 is simplified as soon as possible, the IoD claims, and as such the group has submitted its thoughts to the Office for Tax Simplification, which is reviewing the legislation.

Richard Baron, head of taxation at the IoD, said that the OTS is well-placed to produce something better than the "dogs dinner" that is IR35.

"The real challenge will be for the Government. Will it show that it means business about tax simplification, by accepting the Office's recommendations when they appear or giving a watertight reason for rejecting them?" he added.

Contractor Calculator recently warned self-employed workers that the replacement IR35 may not be any better.