IT contractors have been advised that they can claim businesses expenses in a way that permanent employees cannot.

According to Contractor Calculator, many of the expenses paid out by an individual during the course of a contract can come directly from the fee and reduce the overall tax bill.

Things such as laptops, software and other items essential to the IT contractors work can be taking from the pre-tax fee, while the VAT can also be claimed back, the website notes.

In addition, Contractor Calculator states that travelling to a client's office counts as working at a temporary workplace under HM Revenue and Customs rules, so travel costs can also be claimed back from the fee before tax.

New research from software company Version One finds that 86 per cent of senior IT professionals, including IT contractors, still rely on paper records rather than switching to electronic document management systems.