Background

When payroll and on-costs have to be reduced, some businesses engage subcontractors instead of employees: headcount goes down, payroll and NIC costs follow. In industries where there is a premium on a flexible workforce, employers use subcontractors to cope with the ebb and flow of demand and enjoy the fact that they do not incur the normal employment costs of NICs, pension and other employment benefits and rights as well as appreciating the ability to acquire and dispense with workers' services at short notice.

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