IT contractors have been warned not to be lulled into a false sense of security by HMRC's new "softly-softly" approach.

Freelancing trade body PCG claims the tax office is increasingly using a gentler approach, using letters and phone calls to raise issues rather than simply giving IT contractors a formal notice of dispute.

However, PCG claims that HMRC is still looking at contractors as closely as ever, as often an informal meeting called for by the tax man can have an ulterior motive.

"Replying in the wrong way can cause a lot of time consuming headaches later on and any dispute should therefore be handled by a qualified expert – this is an integral part of PCG membership," the group states.

PCG urges any IT contractors to seek professional advice if approached for any meeting with HMRC, informal or not.

Andy Vessey of Qdos Consulting recently stressed the importance of using correct terminology when corresponding with HMRC, as incorrect use of the term 'bonus' can lead to an IR35 investigation.