The current IR35 rules leave wealthy contractors almost 'unharmed' while contractors on more modest rates are frequently controlled by the client, one expert has said.

Dave Chaplin, chief executive officer of Contractor Calculator, wrote that one of the key tests of employment is whether the contractor is controlled by the client and highly skilled contractors rarely get told what to do.

According to the writer, this means they are classed as 'disguised employees' and therefore avoid falling into the IR35 criteria.

This is worsened, he says, by the fact that the complex test of employment used to determine whether a contractor is a disguised employee can only be understood by judges and experts in employment law.

"What this all demonstrates only too clearly is that the existing tests to determine IR35 status are catching neither fish nor fowl at either end of the food chain, and those few that it does catch are likely to be sprats not worth the effort involved," he says.

Meanwhile, the coalition government has called for negotiation over a successor to the IR35 system.