Getting a mortgage, as a private contractor?

[nine_tails]

But how do people manage it in the first place? Do employers not check on this?

You would be surprised how many calls i used to get while contracting with these schemes. Any one using this gets to keep upwards of 85% of their pay check and is down right illegal. I don't know if this bloke did it knowingly or just fell for it. They do sell it hard.
Employers don't care , as a contractor you pretty much provide a bank account and they deposit money into it. You are liable to pay tax.

I am actually surprised that your friend has not been audited already by HMRC. At this point if i were him , i would honestly look to clean up this mess he has managed to land himself into. Sooner or later he will find himself in trouble.

 

[wildman]

he is going to jail and will experience daily Snu Snu from the resident pimp..................

 

[tsobo]

This is why our country can't have nice things.

I agree, I don't understand though why these loop holes exist in the first place.

 

[Semple]

Does “he” do contracting for the Comma Society?

I'd be useless as a teacher, totally brushed over all those unnecessary commas.

 

[Pudney]

I agree, I don't understand though why these loop holes exist in the first place.

They don't really exist per se as a loophole. It's generally a difference in interpretation due to potentially ambiguous wording, with the avoidance promoter taken a generally aggressive interpretation that normally ends up losing.