Gordon Brown has been forced on to the defensive over taxation pledges in Labour's forthcoming election manifesto.
The Chancellor refused to rule out raising national insurance contributions (NICs). The manifesto next week will repeat the commitment at the last election not to raise income tax, but it is expected to remain silent on NICs.
NICs were last raised by 1 per cent after the 2001 election to fund higher spending on the health service. However, no mention of the plan was put in the 2001 manifesto.
A further 1% rise in both employeers and employers NI would not affect contractors outside of IR35. For a contractor on £30 per hour caught by IR35 the NI rises would result in a reduction of monthly net income of about £25.
The Prime Minister has insisted that Labour will not "go back" to its old ways by copying the Liberal Democrats with a commitment to raise the upper rate of tax to 50p in the pound for those earning more than £100,000.
A 50p tax rate on earnings over £100,000 would only affect those contractors earning more than £75 an hour, or £600 per day.
Mr Brown does not intend to raise thresholds for the upper tax level of 40p in the pound in line with inflation. It will mean more tax payers being drawn into the higher rate of tax, known as "fiscal drag".