And in the UK if the contractor is self-employed they are at risk if being caught by IR-35: http://www.contractoruk.com/ir35/what_is_ir35_rules_explaine...

IR-35 is employment duck-typing. If it walks, talks, and quacks like an employee, then it's an employee and should be taxed as such, even if it claims it's an independent contractor.

Isn't the tech industry notorious for abusing contractor law to avoid paying for things that are required for their employees, particularly startups?

Usually in this case the developer is an employee of another company (this company can tell them what to do) and the first business is paying the second for this developers time.

Being employed via 1 or more companies is not protection. The UK government is persuing people who were hired as contractors via a staffing agency which then encouraged them to set up a personal Ltd company.

Typically these contractors pay themselves a mixture of dividends and normal paye pay to minimise tax, and the gov is saying the dividends were never really dividends so they need to pay tax and ni on them including the employers ni.

Currently this is limited to specific staffing agencies who actively instructed new contractors to create a personal company but I don't think it will stop there.

I've long felt most contractors are well within ir35 and it has been tollerated. This may be ending.

They'll get paid at much at more competitive rates though.