The time has come for employees being described as contractors to be identified and taxed according it has been claimed.

Contractor Calculator is hoping that the new Office of Tax Simplification (OTS) will go some way towards stopping this practice, which harms conditions for legitimate IT contractors.

Genuine IT contractors can benefit from lower rates of income tax and also enable larger organisations to grow.

However, allowing contractors to effectively become a full-time employee while retaining contractor status harms the legitimacy of the system, the site claims.

The firm's chief executive officer Dave Chaplin explains: "They expect to benefit from the favourable tax regime that comes from being a risk-taking business, but without the risks of generating growth or building a business.

"In other words, they're not fulfilling their part of the bargain."

IT contractors will have been buoyed by the news earlier this week that the OTS will be drawing up new legislation to replace the much-derided IR35 code.