It's my understanding that, basically, if you're an "outsourced employee", you have to pay the same things as if you were an actual employee: so salary, income tax, whatever else HMRC requires, rather than milking the dividends... It doesn't seem to me that the actual setup is illegal.

[0] https://www.gov.uk/guidance/understanding-off-payroll-workin...

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edit: In France, I'm not aware of a similar law in regard to taxation. However, there's a "worker protection" law that says that if you're only working for a client, you are subordinate to them, and basically the only difference between an actual employee and you is that you're outsourced, you can then sue the company to be "promoted" to an internal employee, and you're basically guaranteed to win.