IT contractors now have access to a free online tool that will help them to establish their tax status.

The Employment Status Tool has been developed by former IT contractor and current chief executive officer of Contractor Calculator Dave Chaplin.

By using this device, freelancers will be able to make confident decisions about their tax status, thanks to a clear answer based on the very latest case law, Mr Chaplin claims.

Each of the sections has a weighted algorithm that takes into account which questions are likely to be most relevant for that particular case.

"In today's litigious business environment, when contractors have to exercise reasonable care when faced with tax decisions this tool will be the first step to help them," Mr Chaplin added.

The permanent secretary for tax at HM Revenue & Customs Dave Hartnett recently told the Financial Times that the tax office is to soften its stance and become less combative.