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I've said this before. There should be no such thing as an intermediate status. A person should either,

a. be employed, pay PAYE, pay for NI as an employee, be directed, have employment rights, be paid by time, claims expenses, and if they get it wrong (except by dishonesty) they get disciplined/sacked but the employer carries the risk, etc or

b. be a sole trader or partner, be taxed as such, pay NI as such, not directed, have no employment rights, deliver a bill verbally or physically, charge disbursements, charge and collect VAT unless below limit and if they get it wrong, be liable to be sued, etc.

This should be decided by the 'quacks like a duck' test already referred to, and as a matter of general contract and employment law, irrespective of what happens to suite a particular employer, employee, sub-contractor or whatever. And, in particular, it should be the relationship that actually exists between employer/employee, provider/customer etc that is the determining factor which it is.

The taxation treatment should follow from that, not the other way round. It should never be the Revenue or its convenience that gets to decide who, either in principle or on particular facts is an employee and who isn't.