The government has a tough job on its hands finding the right balance for whatever piece of legislation replaces IR35.

This is according to Contractor Calculator's chief executive officer Dave Chaplin, who claims that any new rules must encourage IT contractors without opening up loopholes for abuse of the tax system.

While Mr Chaplin stresses the need to make life easier for IT contractors, he acknowledges the need to avoid soft legislation which can be used for tax evasion.

He explains: "The replacement of IR35 presents a fantastic opportunity to unleash the contracting workforce from the current stifling burden of legislation that could potentially generate much more benefit to UK Plc."

Nizar Manek, a writer at the London School of Economics, speculated in a blog published by Reuters that IR35 could be replaced with a General Anti-Avoidance Rule "super law".

He added that legislation built on principals will provide clearer guidance to IT contractors.