@DaveK said:
Thus the government tried to create a set of rules, called IR35, that attempted to define whether someone was really a contractor, or if they were in effect a disguised full-time permanent employee of one employer.
In the U.S. it's very simple. If you are subject to detailed direction and control by the principal in how you perform your tasks, then you are an employee. If you aren't, you're a contractor.
Case in point. If I hire someone to grout and tile my kitchen floor, they're probably a contractor. If I have the right to make them take out the dogs, fetch the newspaper, make me coffee, etc, then they are an employee.
The IRS, DOL, SSA, and the state government might come after me if I try to call that employee a "contractor", since I'd be missing out on paying payroll taxes (SSA) and qualified retirement plan benefits (DOL), which would affect my personal and corporate deductions (IRS). The state versions of these agencies would come after me for their counterpart reasons (workman's comp and unemployment insurance premiums, tax deductions both personal and corporate due to the retirement plan thing) and, being the state government as opposed to the federal, would have virtually unlimited power to destroy me. If I got caught.