By now you may know that even HMRC are employing hundreds of IT Contractors who run single person companies as a kind of tax avoidance scheme. The majority of these contractors will probably only pay themselves the National Minimum Wage and the rest is being withdrawn via loans from offshore trusts – which are free from UK tax and NIC. This seems to be ignored by HMRC despite their anti-avoidance activity elsewhere.
But everybody focuses on the contractors. Nobody focuses on the saving these scheme offers the government agencies like HMRC because they dont have to pay NIC on the underlying payment to the contractor. Clearly we are all quite puzzled (I am using a fairly neutral word) because the hypocrisy would be outstanding.