As part of its tax avoidance objectives, successive Governments have looked very closely at disguised employment, i.e people claiming to be self-employed when for tax purposes they were really employees. The first major attempt to combat this came in April 2000 when IR35 regulations came into force.
The current Government has revisited this whole area under the “false self-employment” banner and is targeting companies and individuals that it believes are not paying all of the employment taxes that are due. When recruiting staff employers need to be clear of the regulations or they risk fines and interest from HMRC.
http://www.birkettlong.co.uk/site/library/legalnews/false_self_employment.html?
