Re: Sounds like a recipe for disaster.
I'm guessing that one way such a company might work would be similar to the contractor umbrella companies in the UK that help VAT-registered self-employed contractors avoid IR35 transgressions. Those umbrella companies take a small-ish fee (my hazy recollection is about £30 per month) for doing the paperwork. They also take the 20% VAT that the contractor adds to invoices, pay about three-quarters of that (I forget the exact figure) to HMRC and keep the other quarter of the VAT for administration overheads. This (perfectly legal) skimming of the VAT gives the umbrella company significantly more income than the £30/month fee charged to the contractor.
Biting the hand that feeds IT
