The controversial IR35 tax will be repealed if the Conservatives win the general election on 7 June, their manifesto promised last week. The Liberal Democrats would also scrap the tax, and the Scottish National Party have said the tax must be reviewed.

The Conservative manifesto, entitled 'Time for common sense', states: 'We will repeal the tax on IT consultants, the notorious IR35, which has driven away from Britain some of our most productive workers. We will replace it with targeted anti-avoidance measures.'

Introduced in April last year, IR35 was designed to close a loophole used by contractors setting up limited companies to avoid paying full levels of tax and National Insurance contributions. The Conservatives have accused Labour of 'trying to disguise increases by introducing new stealth taxes'. IR35 costs IT consultants £100m a year, according to the Tories.

The Liberal Democrats would scrap the tax in favour of the proposals outlined by the Professional Contractors Group (PCG). 'We are in favour of removing the Friday night to Monday morning loophole, but the scope of IR35 is too wide,' Liberal Democrat spokesperson Alison Bull told Professional Recruiter.

IR35 is 'badly designed', said SNP spokesperson Kevin Pringle: 'We propose a comprehensive review of taxation to make it simpler, fairer and more transparent to enhance the competitiveness of business.'