Re: Risk vs Reward
"Does anyone know whether HMRC have ever responded to this frequently-made point about benefits?"
Not officially, but self employed (note: important distinction vs. ltd. company) people have in the past successfully sued their clients for statutory holiday pay and pension contributions after they were engaged as self-employed contractors and then found by HMRC to be caught by IR35. So there most certainly is legal precedent for it.
The real kicker here is that the client-side determination of IR35 status here is also coupled by the client's insistence that the contractor be operating through a ltd. company rather than as self-employed. This key point allows the client to dodge the employer's taxes and palm off the responsibility for them onto the ltd. contractor.
In other words, the entire setup is actively rigged for the government departments to dodge both employer's statutory liabilities/obligations _and_ employer's taxes and shift them onto the employee.
Biting the hand that feeds IT
