The chief advantage of the PAYE system as far as the government is concerned is that it enables them to collect tax more quickly and transfers the administrative burden of collecting tax from the state (via H M Revenue & Customs) to the individual employer.
In effect this means that a payroll services department needs to know almost as much about the tax system as the Revenue. This reduces the Revenue's role to one of policeman, or as some cynics might say, traffic warden.
However hard you consider your decisions before taking them, it will only take someone from the local tax office to disagree with your interpretation of the law to embroil you in a time-consuming and often expensive dispute.
Status disputes are about whether an individual is self employed or an employee. The Revenue will nearly always argue for employment rather than self employment as the self employed not only pay their taxes later but are able to claim far more expenses as deductions rendering them liable for less tax.
We at Dataplan Payroll take away the worry for you by operating payroll services on your behalf. We only do payroll so naturally we know what we are doing and are able to minimise disputes and problem areas.