A group which represents around 20,000 of the UK's freelance workers has warned against clamping down on Britain's smallest businesses.
Chris Bryce, chairman of PCG, has urged caution following media reports that civil servants across Whitehall exploited current employment rules which allowed them to be paid as companies rather than employees, and subsequently pay less tax.
According to a report by the Financial Times, representatives from the PCG and the Freelancer and Contractor Services Association were due to meet with tax officials today, with Mr Bryce expected to call for calm.
There are concerns that moves to clamp down on those abusing the system could negatively affect all independent workers if pay regulations are tightened.
He told the newspaper: "We have an almost hysterical witch hunt to clamp down on the very sector in the economy which is actively growing."
Mr Bryce said last week that while it is right the government should look closely at cases of possible disguised employment and tax evasion, it is "fundamentally inaccurate to brand all one-person limited companies as employees attempting to avoid tax".